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Small Business Tax Q&A: January ’18

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in Small Business Tax

A quick tax fix on repairs

Q. In your article on year-end tax moves for businesses (SBTS Nov. 2017), shouldn’t the exception mentioned for repairs be $2,500? Anonymous

A. Yes. There’s a great deal of confusion over the tax treatment of items that may be characterized as either currently deductible repairs or improvements that must be capitalized (see SBTS Dec. 2017).

However, under recently-issued regulations, a special safe-harbor “de minimis rule” effectively allows a business to currently deduct repair costs if the total amount of the items falls under a threshold of $2,500 for the year, not $500 as stated.

Tip: The threshold is increased to $5,000 if the business has an “applicable financial statement” approved by a CPA.

Putting tax brakes on car use

Q. I’ve used the standard mileage rate for my business car. Do I owe tax if I stop using the car for business? J.D.T., Phoenix

A. No. There are no tax c...(register to read more)

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