***IMPORTANT FOR BUSINESS OWNERS*** The last few years we have been accustomed to deducting all (or the majority) of fixed asset purchases in the year the purchase is made. Example...If you purchase a piece of equipment for $50,000 & start using it in that year, then we had the option of deducting ALL of that $50,000 in the year of purchase instead of spreading the deduction out over 7 years. The IRS code that allows this is called Section 179. The limit for the past few years has been up to $500,000 per year. For 2014, that limit has gone back to $25,000! This is a huge tax planning piece of information for lots of my clients. I get several calls in November & December asking Do I need to go buy equipment/truck, etc before the end of the year? Now, my answer may be Hang on to that money because its not going to do you much good to buy that equipment & youll need that money to pay Uncle Sam in April! HOPEFULLY Congress will get off their bums & pass legislation to extend the old Section 179 limits of $500,000 per year. But if they do it after the end of the year & make it retroactive for 2014, that doesnt give my clients time to tax plan & figure out if they need to buy equipment or not. This is a major economy suppressor. I had a client in my office just this morning that is connected to a Farm Equipment Company. He said it is hurting his business because farmers arent spending money to buy equipment because they dont get the immediate tax benefit from it & they are holding that money to pay potentially higher tax bills this coming tax season.
Posted on: Thu, 30 Oct 2014 18:16:43 +0000
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