Tax and Money Tip this Week:
Take 2015 Section 179 Depreciation to Maximum-And Wait For Congress!
December 16, 2015 | No. 263
See below for the artcle on Section 179 by: Business Management Daily
Take Section 179 to the max.
For property placed in service in 2015, the maximum Section 179 deduction for qualified business property is currently only $25,000, down from $500,000 in 2014. The deduction in reduced dollar-for-dollar for purchases above $200,000 reduced from a $2 million threshold in 2014. Absent and quick-strike law change by Congress, maximize the Section 179 allowance. Then wait to see whether you’ll have more flexibility along with bonus depreciation.
Tip: In any event, your Sectional 179 deduction can’t exceed the income from your business activities.
Will bonus depreciation be revived?
Along with the fate on generous Section 179 deduction rules that have been in place in recent previous years, the fate of first-year “bonus depreciation” has yet to be decided.
Alert: The bonus depreciation tax break for qualified property, which has been approved and extended several times in the past, expired at the end of 2014. However, it could be reinstated retroactive to Jan. 1, 2015, if Congress takes action, as we expect it will.
In its last reincarnation, the deduction was equal to 50% of the cost of qualified new (not used) assets, including tangible property with a cost-recovery period of 20 years or less, most software, and certain leasehold improvements and water utility property.
Tip: Under current law, 50% bonus depreciation can still be claimed in 2015 for certain assets with longer production periods that are placed in service by year-end.
Questions or Comments?
You can add comments on the blog, call 919-847-2981, or visit our web site. We look forward to hearing from you.
Mark Vitek, CPA/PFS, CFP®
…until next week.