In a prior post, I listed some of the beneficial tax provisions affecting individual taxpayers. This post lists some of the most popular tax extensions for businesses.
First Year Expensing of Business Asset Purchases
Section 179 allows businesses to deduct up to $500,000 of qualifying asset purchases in the year the asset is placed into service. If this law had not been extended, first year expensing would have been limited to only $25,000.
50% Bonus Depreciation
Normally, when you buy long lived property, you can’t deduct the full cost of the property in the year you purchase it. The purchase price is deducted over the expected life of the property. Bonus depreciation allows 50% of the cost of qualifying property to be deducted in the year the asset is placed into service.
Accelerated Depreciation of Qualified Leasehold, Restaurant, and Retail Property
In 2010, Congress passed a law that allowed a $250,000 Section 179 deduction on qualifying real property. The law allowed Section 179 deductions on real property placed in service during 2010 and 2011. The law has been extended through 2014.
Research & Development Tax Credit
This is a general business tax credit for companies that incur R&D expenses in the U.S. This credit has repeatedly been extended since its original passage in 1981.
The Work Opportunity Tax Credit
The Work Opportunity Tax Credit is available for a portion of first-year wages paid to certain qualifying employees who begin work during 2013 (now extended through 2014). The credit is available for employers who hire members of the following targeted groups:
- Long term family assistance recipients
- Vocational rehabilitation referrals
- Summer youth employees
- Nutrition assistance recipients
- Social security income recipients
- Designated community residents
- Qualified IV-A recipients
Buzzkill Disclaimer: This post contains general tax information that may or may not apply in your specific tax situation. Please consult a tax professional before relying on any information contained in this post.