On Tuesday, the Senate passed legislation that will keep certain business related tax breaks in place for all of 2014. This includes higher levels for section 179 expensing and bonus depreciation. The House previously passed the bill and it currently awaits the president’s signature.
Under the legislation passed Tuesday, businesses may be able to expense as much as $500,000 with the deduction phasing out when qualifying assets are above $2 million. Had this legislation not passed, those limits would have gone back to $25,000 and $200,000, respectively, for 2014.
Additionally, the legislation allows bonus depreciation for 2014, allowing businesses to immediately expense an extra 50 percent of the cost of qualifying property purchases instead of over time. You may also access a summary of the entire legislation.
While leaders in Congress were negotiating for a longer term or permanent extension of these provisions, the president opposed such a move. As a result, Congress passed an extension that only covers tax year 2014.
Members of both parties will likely begin work in 2015 to more broadly reform the tax code and to give greater long term certainty on some of these tax provisions that regularly expire.
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