You have just 4 days to make personal property purchases for your business. After that, you lose a lot of options when it comes to expensing those items.
Section 179 allows you to immediately deduct items that you would normally need to capitalize and depreciate over time. The current max amount that can be expensed in 2013 is $500,000. If you have total purchase of over $2.5 million, the Section 179 begins to reduce.
In 2014, the max amount will be just $25,000
Yes, that’s right. We’re going from $500,000 to just $25,000.
Another provision that is going away in 4 days is bonus depreciation. Bonus depreciation allows you to front-end load your depreciation by 50% of the purchase amount of new items.
That goes away in 2014 as well.
One of the Section 179 tricks has been to buy vehicles that are over 6000 GVWR. If you do that, you get to immediate deduct $25,000 in 2013. You don’t get that in 2014.
If you have a vehicle that is both a heavy vehicle and has a long bed of 6’ or more, you can use a Section 179 on the entire purchase. But only in 2013.
There are a lot of tax changes coming and unfortunately, most of them are bad for the small business owner. Act now, while you still have a chance!