Legal Disclaimer: This article is written for informational purposes only and does not constitute professional financial advice. Please reference section179.org and a professional accountant for advice on financial planning and filing taxes.
As 2020 comes to an end, you might be thinking about all of this year's expenses and wondering what you might be able to write off on your taxes. You may even be considering whether or not to make a big purchase, weighing the tax deductions you could get if you bought it this year versus next.
Is it worth buying that new lift before the year ends? Or should you put it off until 2021?
What is Section 179?
Section 179 of the IRS tax code allows business owners to write off the entire cost of a piece of equipment, renovations, or other assets in the first year instead of writing off an asset a little bit at a time over a five, seven, fifteen, or thirty-nine year period. To give an example, if a shop owner buys a new tire machine, they could either write off the taxes over a seven-year period, or they can use Section 179 to get the entire deduction in the first year.
What Type of Costs Qualify for Section 179?
Tangible business property, including machinery and equipment
Leasehold improvements
Computer software*
*Is Tekmetric Eligible for Section 179?
Generally speaking, off-the-shelf computer software that has been purchased outright is eligible for Section 179. Because Tekmetric is a web-based software and does not make users sign a contract, it is not eligible for section 179, but it does qualify for a standard tax deduction.
What are Leasehold Improvements?
Leasehold improvements are any repairs or modifications that you make to your building or property, including adding a new roof, installing security or safety systems, and remodeling parts of your building without expanding the footprint. Without Section 179, leasehold improvements depreciate over 15 or 39 years, depending on what the improvements are. With Section 179, you can receive the entire deduction in the first year.
How Often Does Section 179 Change?
Section 179 is typically adjusted every several years. Most recently, Section 179 was adjusted in 2018 when the deduction limit was doubled and more types of purchases were made eligible. Section 179 may change again in the following years.
When Should You Use Section 179?
If you know that you’re going to pay taxes this year, and you have made a major qualifying purchase, then you may want to consider using Section 179 to save on your taxes and free up some cash flow for 2021.
If you financed a major purchase, you may want to consider how soon you plan on paying off that purchase and whether or not you would like to receive a tax deduction in the following years as you pay it off. For example, if you have a loan on a piece of equipment that you plan on paying over five or ten years, you may want to opt for the regular depreciated tax reduction so that you have money to offset those taxes in the following years.
Should You Make a Major Purchase Before the Year Ends to Use Section 179?
It’s not the wisest decision to buy something just to save money. It is true that Section 179, and tax benefits in general, are the best that they’ve been in years, but consider only making a major purchase if it is already in your plan and budget. If it is something that you already planned on buying in the next six months, then you may want to make the purchase before the end of the year to leverage Section 179’s tax deductions.
Talk to the Auto Repair Accounting Experts
Every situation is different. Take a look at what your tax rates are and ask yourself, "Is my income low enough this year where I'm actually reducing taxes at a pretty low rate? What do I think the tax rates are going to be in the future? Or will this benefit me more in the coming years when I think I'll be making more money?"
Talk to your accountant to form a game plan for all of this.
This article was written with the guidance of automotive repair industry CPA Hunt Demarest of Paar, Melis, & Associates, P.C.
Need help planning your taxes for 2020? Contact Paar, Melis, & Associates.
FAQ
similar articles
Selecting the right business name for your auto repair shop can be a challenging task. Your business name will be the first impression your potential customers have of your shop and will determine how memorable your shop will be. Use the ideas below to brainstorm the perfect name for your auto repair business.
Creative auto repair shop names
On The Road Again Repairs
NextGear Auto Service
Check Engine Repairs
Torque of the Town
The Engine Room
Chrome & Steel Auto Care
Axle & Alloy Repair Co.
Peak Performance Garage
Smooth Ride Mechanics
Driven Dynamics
Velocity Auto Shop
ClearPath Automotive
Funny automotive repair shop names
The Brake-Up Shop
Motor Mouth Mechanics
Hit & Run Body Shop
Exhausted Mechanics
Hot Wife Automotive A/C Repair
Don’t Tread On Me Auto
The Laughing Lugnuts Auto Repair
Wheel Be Alright Auto Repairs
Motor Mouth LLC
Rust in Peace Repairs
Tek-Tip: Have you thought about how you will market your new business? We reccomend Shopgenie for all automotive marketing needs including websites, CRM, reviews, and more.
Cool mechanic shop names
The Car Whisperers LLC
RoadReady Mechanics
StreetSmart Garage
GearShift Garage
Velocity Motors
Gearhead Garage
The Repair Authority
PitStop Pros
Full Throttle Repair
Trackside Garage
Unique and catchy names
Car Medic Garage
Nuts & Bolts Car Mechanics
Unleaded Car Repair
Honest Engine Repair
Auto Barn Car Care
Iron Horse Garage
Blue Ridge Auto Works
RevSync Mechanics
The Auto Vault
Summit Auto Haven
Rust & Revive Repair
Simple auto shop name ideas
Car Surgeons
The Car Guys
Engine Experts
Quick Fix Automotive Repairs
The Brake Brothers
One Stop Auto Shop
Auto Solutions Inc.
Pit Stop Garage
Turbo Tires & More
Wrench Wizards
Service-Specific shop names
Brake Check Repairs
Oil Be Back Automotive Repairs
Vivid Vehicle Body Shop
1 Hour Heat and A/C Auto Repairs
Battery Solutions LLC
Actually Discounted Tires
Renew Collision Center
30min Oil Change Shop
Restored Right Auto Body Shop
Mobile mechanic business names
Repair on Wheels
Roaming Automotive Repairs
One Stop Repair Shop
One Call Repairs
Wheels On The Way
(Insert last name) Mobile Mechanic
The Leaky Gasket Mobile Repair
1 Hour Mobile Mechanic
24/7 Mobile Mechanic
How to select the right auto repair shop name
Once you have your list of potential shop names narrowed down, it is time to do a final round of research to make sure your name is legal, optimized and ready to launch. Check out our final 6 tips and tricks below.
1. Legal checks
Before you can launch your new automotive shop name, you should check for Trademarks by visiting the US Patent and Trademark Website. Simply search your pending business name to see if it is taken or if you can proceed.
Search engine optimization for auto repair shops is an important avenue for driving brand awareness and new customers. To maximize your new business name, aim to include common keywords like “automotive”, “repair”, and “shop”. Also, try to use local terms like “Houston” to help search engines know where your services are located. Lastly, check to see if any competitors are using a similar name and determine if your name will be unique enough.
GoDaddy can check if your new automotive repair shop name is available to use. You will also be able to see how much the domain name will cost and whether it would be cheaper to use a variation of your business name.
4. KISS
Keeping your new shop name simple will help you in the long run. Potential customers will find it easier to remember (and share via word of mouth) if you keep it short and simple. Plus, shorter business names are easier to fit on business cards, advertisements, and social media.
5. Marketing
Looking down the road, your new business name should fit within your overall automotive marketing strategy. Are you planning to use a certain logo or color scheme? Make sure your name fits the theme you are aiming for and attracts your target audience. If you plan to use social media marketing, check to see if your business name is available as a social handle.
6. Set the tone
Your name is likely your first impression with your customers. Once you are ready to launch, give it one more review to make sure it conveys the right brand identity and message. Lastly, have a friend or colleague offer feedback on your business name and see how it resonates with them.
Closing Thoughts
Finding the right name for your business is a daunting task and we hope this guide has helped you brainstorm new business name ideas and narrow down your list. We recommend taking the extra time to make the right choice up front so you don’t have to rebrand down the road. As always, there is wisdom to asking for feedback from your community. Select your top 5 names and ask for help picking the best shop name for your business.
Building a startup takes time, effort, and a lot of determination. You and your team have invested in a great idea, and everyone works diligently to bring new team members, investors, and customers on board. However, the process doesn’t end once the product or service has taken off and gained popularity.
A startup can operate on a lean team, with people wearing multiple hats and taking on extra responsibilities. But as the company grows, it will be time to hire more employees and scale the company to meet demand.
How to scale the business is an enormous question that causes hesitation for many leaders. How do you expand your business offerings and your team without losing the heart and inspiration that helped the startup succeed in the first place?
In my own business, Tekmetric, which offers shop management software for auto repair businesses, I have relied on a few tactics that enabled me—and our whole team—to scale sustainably. Here are four of the most vital.
Thought Leadership
Shop Management
You’ve Built a Successful Auto Repair Shop Startup. Now What?
In auto repair, there are many moving parts to keep track of—both the literal parts your shop uses to repair vehicles, and the parts of your business that determine your shop’s efficiency, security, and ability to grow. If you want your shop to flourish, it’s crucial to devote part of your business to keeping track of the parts you order.
Many shops track parts in terms of cost of goods sold. The parts you need for the job are included on every repair order, so it’s easy to see what parts your customers are paying for as long as you have a solid process for building repair orders.
But what about in terms of accounts payable? How does your shop track how much you’re spending for parts from the supplier?
Thought Leadership
Why Match Parts from Repair Orders on Purchase Orders?