Sec. 179 allows businesses to write off some or all of the acquisition costs of qualifying properties, as opposed to depreciating them over the life of the asset. The annual limitation was $500,000 in 2011 but dropped to $125,000 in 2012. It was expected to drop to $25,000 in 2013. While this amount is the maximum amount that can be expensed, the annual dollar amount is reduced dollar for dollar by the amount that the taxpayer’s total investment exceeds the annual investment limits. This annual investment limit likewise has been decreasing. The amount was $2 million in 2011 and $500,000 in 2012, and it was expected to drop to $200,000 in 2013.
There were concerns that these reductions would hinder the desire for small businesses to invest and further depress economic recovery. As a result, ATRA retroactively reinstated the $500,000 limit for 2012 and continued this limit for 2013. In addition, the $2 million annual investment limit was retroactively reinstated for 2012 and prospectively continued for 2013. ATRA also extended the rule allowing taxpayers to expense off-the-shelf computer software under Sec. 179. The retroactive extension of the annual limitation and investment limit may provide planning opportunities for an immediate write-off of expenditures.This entry was posted in Uncategorized. Bookmark the permalink.
W.A. Campion Co., P.C. is more than the typical accounting firm. While we do provide traditional tax preparation and accounting services in Minneapolis, we also offer other business advisory and financial services to our clients helping them with the financial decisions crucial to the success of their businesses.