2014 Tax Extender Bill Passed
December 19, 2014
Our friends in Congress finally passed the tax extender bill for 2014, although the President still has to sign the bill which is expected to happen yet this week. Many tax breaks expired at the end of 2013. It took 11-1/2 months for a decision, but they finally decided to bring back those tax breaks for 2014. The extension now expires at the end of 2014 so Congress will have to again make a decision in 2015 whether to keep the deductions in place or let them expire.
The main item in the tax extender bill that affects our business clients is the depreciation deduction. The 2013 rules for the 50% Bonus Depreciation on new equipment is available again for 2014. The election (Section 179) to fully expense equipment purchased up to $500,000 (providing a business does not purchase more than $2 million of equipment) has been extended for 2014. Qualified leasehold improvements can be depreciated over 15 years instead the normal 39 years.
Many businesses are profitable in 2014 and still looking for ways to reduce the tax bill created by their profit. In order to take advantage of the depreciation deductions listed above, the new equipment must be purchased and placed in operation by December 31, 2014. Some businesses have already purchased a significant amount of new assets and were limited on the depreciation, but with the tax extender bill passing, many may still be able to significantly reduce their tax bill for 2014.
As always, please call or email our office with any questions.