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IRS Makes Major Change to Fixed Asset Expensing Rules—Benefiting Many Small Businesses

下面是SC的博文&H集团税务葡京官网团队 discusses a recent change to the de minimis safe harbor threshold for expensing fixed assets, providing small businesses with the info to take advantage of this key tax-saving opportunity.

The IRS’s September 2013 release of the Tangible Property Regulations (T.D. 9636)是一个重要的里程碑, as it finally quantified a minimum threshold to be applied when determining whether a fixed asset should be capitalized or immediately expensed.

然而, while the inclusion of a de minimis safe harbor election allowed taxpayers to avoid capitalization of certain expenditures, several restrictions limited its value for small businesses.

没有更多的. 随着发布 请注意2015 - 82, the IRS amended the safe harbor in a way that should allow more small businesses to immediately deduct more costs—beginning with those incurred in the 2016 tax year.

The Original Rule: Limited Benefit for Certain Small Businesses
根据原始规则, the de minimis safe harbor allowed taxpayers with an “applicable financial statement” (generally, a certified audited financial statement) to deduct all amounts properly expensed up to $5,每个发票或项目000.

但, 这项规定限制了小企业, who typically don’t have audited financial statements, 一个小得多的推论. These taxpayers could apply the de minimis safe harbor 只有 if the amount paid didn’t exceed $500 per invoice or item. 除了, it required them to have a written accounting policy and procedures in place for expensing amounts paid for property that:

  • Cost less than a certain dollar amount, or
  • Had an economic useful life of 12 months or less

If the cost exceeded the threshold or the taxpayer didn’t have a written policy and procedures in place, no portion of the fixed asset amount fell within the safe harbor. In this case, the taxpayer had to either:

  • Capitalize the expense, elect the Section 179 deduction, and risk recapture later, or
  • Expense the property anyway and risk a challenge if audited by the IRS

The Revised Rule: An 公司rease in the De Minimis Safe Harbor Threshold
Effective for taxable years beginning on or after January 1, 2016, the IRS has increased the de minimis safe harbor threshold from $500 to $2,500 per invoice or item for taxpayers without applicable financial statements. 例如, if a taxpayer buys 10 pieces of equipment, each with an installed cost plus taxes of $2,450, 他们会扣除全部24美元,500.

The change also comes with audit protection. The IRS will not challenge the deduction if:

  • The amounts can be substantiated with an invoice
  • The taxpayer has procedures in place to treat the item the same for tax and books
  • The taxpayer includes the appropriate election in their return

Under the recent changes, an expensing policy is required in writing 只有 if you have an applicable financial statement. For these taxpayers, the threshold remains at $5,000. 尽管如此, it is advisable to have a written policy and procedures in place, as they could help you make the case that you were entitled to make the safe harbor election.

Want to learn more about if and how your business can benefit from the revised rule or other recent regulatory changes? 接触SC&H集团税务葡京官网团队 在这里.

2019年税收筹划