January 14, 2013

One GOOD Result from the Fiscal Cliff Deal

As ridiculous as the whole "fiscal cliff" fiasco was in Washington, one thing that scared many small and mid-sized business was the expected increase to taxable revenues. While both management and employees are struggling with the increase in the Social Security hold back, at least one codicil of the hastily-ratified H.R. 8: America Tax Relief Act of 2012 works for the SMB world rather than against it.
For several years I've talked about the Section 179 deduction in the IRS code. This program allows businesses to make capital expenditures of up to $125,000 and fully depreciate the assets at tax time. Now, I'm not an accountant, but I'm told by people who do understand this stuff that this is a very good thing! Most people assumed this deduction would disappear with the New Year, but fortunately the dogged insistence by some members of Congress not only kept it active but actually expanded it. The top end deduction limit was increased to $500,000 for 2013 and some software is now included as well. For a more detailed analysis, I encourage you to check out the Section 179 website. Whatever you do, don't wait until the last minute! Heaven knows that the Legislature is prone to change at a moment's notice so use it or LOSE it!

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