Article Date:
May 2010


Word Count:
1035

 

 

Tax Cut for Prepaid Expenses Pays Better Than Seen at First Glance


Tax Cut for Prepaid Expenses Pays Better Than Seen at First Glance

 

Prepaying selected expenses authorized by the tax law gets a bad rap.

 

Many business owners know that they can do this, but they pooh-pooh the results as not being worth the effort. That’s often due to faulty understanding.

 

Let’s start with the big picture. Say we hand you $30,000 next April 15 and tell you that you can pay it back anytime without interest. Would you take us up on the deal?

 

Say you invest this $30,000. Say you invest it at the following rates of return (after taxes) and for the following time periods:

 

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