For 2015 and indefinitely moving forward, you can now expense in the year of purchase $500,000 of qualified new assets. Once you hit $2,000,000 of qualified new asset purchases the $500,000 allowed starts to phase out. Check with us if you have an asset that you are unsure of meets the rules for Section 179.
We must admit we are kind of shocked at this permanent passing of the $500k limit. No more wondering what the limits are until the last few weeks of the year. This is one of the best tax planning tools for folks and their businesses. We’ll take it!
Repairs & Maintenance – When to expense vs capitalize
Business owners often ask us what the dollar threshold is for determining whether something should be capitalized and depreciated vs directly expensed. The government has helped up with some guidelines on this determination. Items costing $2500 or less are now allowed to be directly expensed. This can be repairs, equipment, tooling, among other things. Nothing is totally straight forward with the IRS, so rules do apply. You will need to make a corporate election that you will follow this threshold limit. The election does stay with you on file in the event of an audit. Bill will be working on drafting an election that you can use, let us know when we see you during tax season if you would like one. If you have a unique new asset purchase and are unsure if it can be directly expensed, give us a holler.