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IRS approves ‘quick tax fix’

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Thanks to a new IRS ruling, it’s going to be easier and faster for small business owners to write off tangible property. (IRS Internal News Release IR-2015-133, 11/24/15)

Alert: The IRS has raised the safe-harbor threshold for deducting certain tangible expenditures from $500 to $2,500. The change is effective for the 2016 tax year.

The IRS is implementing this higher threshold in the wake of 2014 regulations establishing tax ground rules for repairs and capital improvements. The change applies to amounts spent to acquire, produce or improve tangible property that would normally qualify as a capital item.

Here’s the whole story: The regulations were spawned by confusion over the tax treatment of repairs versus improvements. The basic rule is that  the cost of repairs is currently deductible by a business. Conversely, improvements must be capitalized and written off over time via depreciation. It’s often difficult, however, t...(register to read more)

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