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Current Status of Accelerated Write Offs of Equipment Purchases

Good morning. As I write this, the outside temperature is 13 below with a wind-chill of 37 below.

What a way to start the new year!

Today we will review the current status of accelerated write-offs of equipment purchases. Since Congress did not act before 12-31-13, most of the accelerated write off provisions have expired.

For tax years beginning in 2013, the expensing limit was $500,000 and the investment ceiling limit was $2,000,000. And a limited amount of expensing could be claimed for qualified real property.

However, unless Congress retroactively changes the rules, for tax years beginning in 2014, the dollar limit will drop to $25,000, the beginning-of-phase out amount will drop to $200,000, and expensing won't be available for qualified real property. The 50% bonus first year depreciation also expired as of 12-31-13.

We will see what Congress does when they reconvene this week in terms of retroactive tax legislation.

Disclaimer: The items included in the Tax Tip Tuesday Video Blog are informational only and are not meant as tax advice. Consult with your tax advisor to determine how any item applies to your situation. IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advise contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

Previous Editions of Tax Tip Tuesday
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