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Tag Archive for Section 179

Heavy Vehicle & Deductible Home Office = Major Tax Savings

You can reap major tax savings with the heavy vehicle and home-office combo. The heavy vehicle produces quick deductions. The home office that qualifies as a principal office eliminates commuting miles, and such an elimination can dramatically increase your business-use percentage of vehicles.

For example, say you bought a $50,000 vehicle that you use 60 percent for business. Your depreciation and expensing elections apply to $30,000. Read more

Federal Tax Reform And Intangibles

Annette Nellen

Federal tax reform discussions have included writing off all business assets (other than land) at acquisition. In contrast, some have suggested increasing the Section 179 expensing amount which covers tangible assets. Some reform proposals have suggested lengthening depreciable lives for tangibles and intangibles. Proposals are obviously quite varied. I think that is primarily due to two factors: (1) no agreed upon goal for tax reform, and (2) focus on hitting a certain revenue target to allow for lower rates in a revenue neutral manner. Read more

Weighing In On Section 179 And The SUV Deduction

Year in and year out, many tax clients rely on purchasing a new vehicle used in their trade or business as a last minute tax planning strategy. Tax professionals surely encourage tax planning one or more years in advance. But we all know our clients, more often than not, realize the pain they are about to face each year somewhere in the third quarter or certainly by Thanksgiving.

Fortunately and especially for those who have professional or operating business clients, section 179 100% depreciation offers some last-minute saving grace. For example, a new 2015 Cadillac Escalade could easily carry an $80,000 purchase price. Assuming 100% business use, the 2014 tax deduction for a third quarter purchase would amount to—

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Continued Bonus Depreciation Or Tax Reform?

One of the fifty seven federal tax provisions that expired at the end of 2013 was 50% bonus depreciation. That has been a temporary provision for several years, primarily aimed at helping economic recovery. It’s also been a generous provision (it was even 100% for a few years). With 50% bonus depreciation, a business claims depreciation on new equipment in the year it is placed in service equal to 50% of the cost plus normal depreciation on the balance. If the company was also eligible for Section 179 expensing, it would first claim $500,000 and then take 50% of the balance and then normal depreciation on the balance.

Temporary tax provisions are often renewed well after they expire. These temporary provisions all “cost” money because they result in reduced tax collections. To be extended in a revenue neutral bill, Congress has to find “offsets” – other tax increases or spending cuts. Read more

2014 Tax Fears & Advice

With my family snugly content amidst a long holiday season I felt compelled to pen some thoughts regarding the ubiquitous United States Tax Code and all its myriad of seemingly scary changes looming around the proverbial corner. This post lists ten tax matters to be aware of in the new year that have come up in conversations with clients. It also offers four recommendations to minimize tax obligations that I’ve found myself repeatedly trumpeting whenever asked. And finishes with some quick reference tax facts.

Be Aware:

1. For 2013 the self-employment tax has reverted back to its normal 15.3% rate, and the limit for the Social Security portion of the tax has increased to $113,700. Read more

2014 Standard Mileage Rates For Business, Medical And Moving Announced

The Internal Revenue Service issued the 2014 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, medical, charitable or moving purposes.

Beginning on January 1, 2014, the standard mileage rates for the use of a car (also pickups, vans, or panel trucks) will be:

• 56 cents per mile for business miles driven

• 23.5 cents per mile driven for medical or moving purposes Read more

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