If you own your own business and have plans to buy office furniture or equipment, or make certain improvements to property, make sure you are aware of the new rules for S179 deductions. While last year the maximum deduction was $500,000, this year it has been reduced down to $25,000. The phase out has also been reduced, down to 200,000. So, every dollar of spending over $200,000 on equipment, will reduce your $25,000 deduction. It is possible that an extension of the $500,000 will be passed by the senate, but as of right now, any legislation to do so is bogged down, and appears unlikely before the end of the calendar year. With this in mind, it may be beneficial to hold off any large equipment purchases until the future of S179 is more clear.
For more tips on year-end tax planning for businesses please visit: http://www.dh-cpa.com/client_media/files/pdf/2013%20YE%20Planning%20Newsletter-Business.pdf
Davis and Hodgdon Associates CPAs has been assiting nonprofits, individuals and businesses with tax and accounting services in the Burlington Vermont Metro area for more than 20 years. If you have any questions or concerns please feel free to call 802.878.1963 or email [email protected].