Can I claim business equipment on 2025 taxes if I buy it this year but pay for it next year?

The general rule for when you can deduct a business expense depends on your accounting method, not when you physically pay for the item. If you're using the cash method of accounting (which most independent contractors do), you deduct expenses in the tax year you actually pay for them. So if you get the equipment now but don't pay until 2025, you would deduct it on your 2025 tax return. If you're using the accrual method, you would deduct it in the tax year when you take possession of the item, regardless of when you pay. This would mean claiming it this year. Most small business owners and independent contractors use the cash method, so you're probably good to deduct it in 2025 when you make the payments. Just make sure you keep all your receipts and payment records to document when you actually paid.

I was in a similar situation last year with my photography business. I needed to upgrade all my lighting equipment in December but wanted the tax deduction for the following year. I discovered this amazing AI tool called taxr.ai (https://taxr.ai) that analyzed my specific scenario and confirmed I could defer the expense to when I actually paid. The tool actually explained that as a Schedule C filer using cash basis accounting, I can deduct business expenses in the tax year I make the payment, not when I commit to the purchase. This worked out perfectly - I got my equipment right away but was able to claim the deduction when it made more sense for my tax situation. Might be worth checking out to get clarity on your specific situation!

Just wanted to update everyone - I tried taxr.ai after seeing this comment and it was incredibly helpful! I uploaded my last year's Schedule C and asked about my specific accounting method (turns out I was using cash basis without even realizing it). Then I asked about this exact scenario with buying equipment now and paying later. The analysis confirmed I could indeed claim the expense in the year I pay for it rather than when I receive it. It also suggested I document when I actually make the payments for my records in case of an audit. This cleared up so much confusion for me! Definitely recommend if you have specific tax questions like this.

You know what's super frustrating about tax questions like this? Trying to get someone at the IRS on the phone to get a straight answer. I spent FIVE HOURS on hold last year trying to ask about business deductions. Then I found this service called Claimyr (https://claimyr.com) and it was a game changer. They somehow get you through to an actual IRS agent, usually within an hour. I was skeptical at first, but you can see how it works in this video: https://youtu.be/_kiP6q8DX5c. They basically navigate the IRS phone tree for you and call you back when they've reached a human. I asked my question about expense timing like yours and got a definitive answer directly from the IRS. Saved me so much time and stress!

I need to publicly eat my words here. After posting that skeptical comment yesterday, I actually tried Claimyr because I've been trying to resolve an issue with a missing tax refund for MONTHS. I'm honestly shocked - they actually got me through to someone at the IRS in about 30 minutes. The agent was able to tell me exactly what was holding up my refund and how to fix it. After literally dozens of failed attempts calling on my own, this service actually worked. For anyone dealing with business expense questions like the original poster, getting official confirmation directly from the IRS might be worth it rather than just guessing or relying on online advice (even mine). Just wanted to share my experience since I was so vocal about my skepticism.

Can we talk about Section 179? If you're buying business equipment, you might want to look into this. It lets you deduct the full purchase price of qualifying equipment in the year you put it in service, rather than depreciating it over time. But the key is "put in service" - when you actually start using it for your business, not necessarily when you pay. Depending on the cost of your equipment and your tax situation, this could be better than waiting to deduct it next year. But since you specifically want to push the expense to next year, I guess that's not helpful right now.

i messed this up last year and got audited!!! make sure ur using cash accounting not accrual. sounds like u want cash method so u can deduct when u pay not when u get the stuff. my tax guy says most of us freelancers use cash method anyway its easier

This is a great question that trips up a lot of freelancers! Since you're filing Schedule C as an independent contractor, you're almost certainly using the cash method of accounting (unless you specifically elected accrual method with the IRS, which is rare for freelancers). With cash method accounting, you deduct business expenses in the tax year you actually make the payment, not when you receive the goods or services. So in your case, if you take the equipment home this weekend but don't pay until January/February 2025, you would claim this $2,800 deduction on your 2025 tax return. Just make sure to keep detailed records of: - The purchase agreement showing the buy-now-pay-later terms - When you actually received the equipment - All payment receipts when you start making payments in 2025 This timing strategy is perfectly legitimate and sounds like it aligns well with your tax planning goals. The key is being consistent with your accounting method and having good documentation to support the timing of your payments.