CPA in Ottawa says: DO NOT Buy Equipment or a New Truck at Year-End Before Reading This

‍Opinion piece by a CPA in Ottawa

The classics:

“Should I go buy a truck?”

“Maybe I should prepay 6 months’ rent?”

“I’ve got too much profit.. I need to zero it out.”

Let me stop you right there. My advise is most often: do not buy anything unless you need it.

What situation do you think is better:

Situation A - Construction company that missed payroll in January, but paid less tax for last year because they bought a new truck in December as a "write off".

Situation B - Literally any company that had profit from last year, paid taxes, and the owner still had tons of leftover cash in the bank to make moves, get approved for financing at the bank, or take on bigger contracts in the new year.

Which business owner would you rather be?

Without cash in the bank, or access to financing, your company most likely will not grow.

I see it every year: Business owners staring down a year-end tax bill, scrambling for something to write off, literally anything they can find.

You Don’t Have a Tax Problem, You Have a Mindset Problem

One client was staring at a projected $60,000 profit. He wanted to spend $50,000 of it on a depreciating asset just to “save on taxes.”

What’s the logic there?

Spend $50,000 to save $15,000 in taxes... and end up with $35,000 less than when you started.

It’s not a tax strategy. It’s most often a panic spending problem or an excuse to make an impulse purchase.

The goal isn’t to erase your profit on paper.
The goal is to build a strong, cash-heavy business that can:

• Handle payroll
• Weather slow seasons
• Have higher ratios to get approved by banks for larger financing
• Fund real growth (not just buy stuff for the sake of it)

Paying tax isn’t a punishment. It means your business made money.

Every multimillionaire who talks about buying new trucks every year has a SOLID history of cash flow planning and disciplined growth of their businesses profit.

So, Should You Buy the Truck?

Sure. But only if you need it anyway.
But if you’re only buying it to shrink your tax bill? I generally say no every time.

Cash gives you options and freedom to try new things in your business. Last minute end of year purchases for no reason other than "write-offs" drain your cash.

If you're unsure and want honest advice before making a big year-end purchase, talk to a CPA in Ottawa.

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This is not legally binding tax advice. This is educational analysis. Say hello if you need help.

hello@taxesmadesimple.ca

WhatsApp - 613.600.4194