Can I deduct business purchases made with a small business loan on my taxes?

12 Thank you for explaining this! One follow-up question - do I need to specifically tell my accountant that I used loan money for these purchases, or do I just list them as normal business expenses? Also, is there any benefit to spreading the deduction over multiple years (depreciation) vs taking it all at once?

5 You don't need to specifically tell your accountant the purchases were made with loan funds - they're just normal business expenses regardless of funding source. List them like any other business expense, but keep records of everything for your files. As for taking it all at once versus depreciation, it depends on your specific situation. If your business is profitable this year and you want to reduce your taxable income now, taking the full deduction using Section 179 might be beneficial. If you expect higher profits in future years, spreading the deduction through depreciation could be more advantageous. Your accountant can help determine which approach makes the most sense based on your current and projected income.

3 How exactly does this work? I'm confused about whether this is just general advice or if they actually look at your specific situation. Does it connect with tax software or is it standalone?

17 Sounds interesting but I'm skeptical. How is this different from just talking to an accountant? I've been burned by "tax help" services before that just give generic advice you could find on Google.

8 It actually analyzes your specific documents and transactions rather than just offering generic advice. You upload your receipts, loan documents, and other financial information, and it uses AI to identify deductions specific to your situation and explains why they qualify. It's standalone but provides reports you can share with your accountant or import into tax software. The big difference from generic advice is it flags specific items in your actual financial data that qualify for different tax treatments.

19 How does this actually work though? Like, do they just call the IRS for you? I don't understand why I would need a service for this - can't I just call myself and wait on hold?

17 Sorry but this sounds like BS. The IRS is impossible to reach. I've literally tried calling dozens of times over the past two years and never got through. There's no way some service can magically get you connected.

9 They use a system that automatically dials and waits on hold for you. When an IRS agent finally answers, their system calls your phone and connects you directly to that live agent. You don't have to sit on hold for hours - you just get a call when someone at the IRS actually picks up. Yes, you can absolutely call yourself, but the average hold time with the IRS has been 2-3 hours lately, and many calls get disconnected before you reach anyone. With Claimyr, you just go about your day and they call you when an agent is on the line.

14 I did equipment financing for my food truck equipment. The key difference is whether it's structured as a true lease or a loan. With a true lease, you deduct the payments themselves as rent expenses. With financing that's basically a loan, you own the equipment and deduct through depreciation or Section 179. My accountant had me review the contracts to determine which type I had - turns out mine was actually a loan despite being called a "lease," so I got to deduct the equipment value upfront with Section 179.

7 That's super helpful, thanks! I didn't realize the contracts might use confusing terminology like calling a loan a "lease." I'll make sure to have someone review the actual terms before signing. Did you find any significant difference in interest rates between traditional small business loans and equipment financing?

4 Exactly right! The principal isn't deductible (that's what you're getting the equipment deduction for), but the interest is absolutely a separate business expense. Good catch - lots of new business owners miss this one.