Q. Can our business claim a fast tax deduction for computer software placed in service in 2014? D.M., W. Hartford, Conn.
A. Wait and see. When the $500,000 maximumwas extended to cover tax years beginning in 2013, Congress also extended a rule allowing deductions for the cost of off-the-shelf computer software (meaning software that is readily available for purchase by the general public is subject to a nonexclusive license and hasn’t been substantially modified). Under current law, the maximum Section 179 deduction for tax years beginning in 2014 is only $25,000 and the deduction is not available for off-the-shelf software (it must be depreciated over 36 months). However, stay tuned because Congress could restore the deduction for off-the-shelf software.