Section 179 deduction limits increase
The IRS allows taxpayers the option of either depreciating some assets over a specified number of years or deducting all or a portion of the cost in one year. The expense election, commonly referred to as the Section 179 deduction, is made in the year the asset is placed in service. The benefit is a large deduction in the current year that is not reduced even if the asset is placed in service late in the tax year.
The Section 179 deduction is not without other limits, however. For example, the most you are allowed to expense in 2007 is $125,000, a $17,000 increase over last year. If more than $500,000 of qualifying property is placed in service, the Section 179 deduction is reduced dollar for dollar until the total investment reaches $625,000, resulting in a deduction of zero. Additionally, your Section 179 deduction is limited to your taxable income from all your active trades or businesses, including wage income reported to you or your spouse on Form W-2.
If you elect to use the Section 179 deduction, you may change your mind and revoke the election. Conversely, if you do not make the election in the year the property was placed in service, you may amend your return and claim the deduction.
Income Tax Preparation, Accounting and Payroll service by Don Brooks & Associates - Don Brooks Associates, Inc.
Main Menu
Tax Tips Small Business
Do You Know How Much Your Business Is Worth?
Tips for placing a value on your business
There are several reasons why you should know the value of your business. if you are planning to sell your business, the general rule is that you should sell it for fair market value. In many instances the term "fair market value" is somewhat ambiguous. In the simplest sense, fair market value is what a willing buyer would pay a willing seller, with each party knowing all the pertinent facts.
Read more...Small Business Quick Tip
| If you have contributed personal assets, such as a computer or vehicle to your business, the lower of the fair market value or your cost basis of these assets qualifies as a business deduction, subject to depreciation limitations, beginning with the date of conversion. |
Saturday, 19th May 2012
Tax Tips Personal
Is an Inheritance Taxable?
In most cases, an inheritance is not taxable to you, but there are exceptions
At some point, you may inherit money or property that, in most cases, is not taxable to you. Life insurance proceeds are included in the deceased person's estate, but are not taxable to the beneficiaries. Bank accounts and other income-producing assets such as stocks are not taxable to you when received, but the income these assets generate is taxable to you.
Read more...Personal Quick Tip
| If your child has earned income from a summer job, you may want to consider opening an IRA for him or her. There is no minimum age for contributing to an IRA. The only requirement is that the person making the contribution has earned income and has not reached age 70 1/2. |