Will Section 179 Limits Increase for 2015?
Every year, it seems that CPAs and taxpayers are faced with a major tax planning hurdle. What assets should the taxpayer purchase, and how much will be eligible for Section 179 and bonus depreciation? We always get to the last two weeks of December, Senate & Congress finally pass the bill, and then we are scrambling to advise clients on how much they should purchase. And, if the taxpayer has to get financing for the equipment, it can definitely prove to be a stressful last few weeks of the year.
As of January 1, 2015, the Section 179 limit decreased from $500,000 to $25,000. Also, bonus depreciation was eliminated. We all hope and believe that Congress will raise the limit again, as they always do every year, but really we cannot definitely say they will. We’ve seen crazy things happen up there in D.C., so who’s to say that they definitely will do something that historically they have always done? Section179.org presented a petition on October 15 to Congress that requested immediate action for Congress to restore bonus depreciation and to increase the Section 179 limit. Hopefully, this petition combined with all of the other nudges from other concerned parties will speed up the process.
My best advice for now is to stay in touch with your CPA so that you are aware if the limit is increased and can then purchase additional assets to reduce your taxable income. Maybe one day they will sign the Section 179 and bonus depreciation into permanent tax code, but for now we play the waiting game every year.