Archive for December, 2015:

business tax deductions

Written on December 28th, 2015 by Jamesno shouts

The recently signed budget agreement included some tax perks for business owners.  Most business owners are aware of the difference between expensing an equipment purchase in the current tax year vs. depreciating it over time.  Section 179 of the tax code allows current year expensing which can definitely help lower taxable income, but the limits had dropped drastically to just $25,000 in 2014.  The good news is that the limits have now been increased back to $500,000 with bonus depreciation thrown on top as well:

Here is a summary from Section179.org:

Dec 18, 2015 -   The “Protecting Americans from Tax Hikes Act of 2015″ (PATH Act) has been passed by both the House and Senate and signed into law – expanding the Section 179 deduction limit to $500,000. Read the summary from the Ways and Means committee here.

Section 179 will be permanent at the $500,000 level. Businesses exceeding a total of $2 million of purchases in qualifying equipment will have the Section 179 deduction phase-out dollar-for-dollar and completely eliminated above $2.5 million. Additionally, the Section 179 cap will be indexed to inflation in $10,000 increments in future years.

50% Bonus Depreciation will be extended through 2019. Businesses of all sizes will be able to depreciate 50 percent of the cost of equipment acquired and put in service during 2015, 2016 and 2017. Then bonus depreciation will phase down to 40 percent in 2018 and 30 percent in 2019.

IMPORTANT: Section 179 for Current 2015 Tax Year (This Year)
Section 179 can provide you with significant tax relief for this 2015 tax year, but equipment and software must be financed and in place by midnight December 31, 2015. Use this 2015 Section 179 Calculator (just updated for the new PATH Act) to see how much the newly expanded Section 179 tax deduction can save your company.

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