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Parlay bigger depreciation tax breaks

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in Small Business Tax,Small Business Tax Deduction Strategies

At this point, no one knows whether Congress will raise the Section 179 deduction or revive bonus depreciation for 2014.

Strategy: Make a safe harbor election under the tangible property capitalization regulations. These new regs effectively allow you to write off more than the maximum Section 179 allowance this year.

If you play this trump card before year-end, you can increase your current deductions for business property, regardless of whether the nation’s lawmakers act or not.

Here’s the whole story: Under the Section 179 “expensing” deduction, many small businesses can currently deduct qualified business property additions that are placed in service during the year, subject to an annual limit. This limit has been increased over time and topped out at $500,000 for property placed in service in tax years beginning in 2010-2013. Although the deduction is reduced dollar-for-dollar for costs above a specified amount, this ph...(register to read more)

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