Boosting cash flow, tax savings via tax reform

Identifying, classifying, depreciating fixed assets

Key aspects of tax reform legislation — bonus depreciation and full expensing changes — as well as a new leasing standard are prompting companies to reconsider how they address depreciation and classify assets. They’re putting themselves in a position to increase cash flow and claim permanent tax savings.

Take advantage of the new rules by reviewing long-held fixed assets. Catching up on missed depreciation deductions can take just a single current-year filing for 2017. The yield is significant cash flow and one-time permanent tax savings. Then, because of the new full expensing provisions, your company can choose to spend more to grow more, potentially buying and building.

Better management of fixed assets and their classifications, and operations in general, is enabled by technology, e.g., the internet of things. As for how the technology is accessed, the new lease accounting standard brings the “lease or buy” decision to the forefront. Lease the services? Purchase the assets and depreciate them over a longer life? Companies that scale up in technology and related assets could reduce their taxable income through tax reform’s interest expense limitation. This provision allows expensing in the current year and in 2022 will include depreciation as a factor, pumping up cash flow.

For further details and recommendations, watch the video.


David CavinDavid Cavin
Managing Director
Corporate Strategic Federal Tax Services
T +1 312 602 8044