Big Changes Coming to Tax Code 179

An expanding and strengthening economy may mean the end of the line of December 31, 2013 for some stimulus-type tax breaks.  The overall code Sec. 179 expensing limit is slated for a drastic reduction next year.

Therefore small businesses planning to purchase a vehicle, machinery, equipment, or invest in eligible real estate assets at the beginning of 2015 may want to consider pushing up their purchase plans.  This year will be the last year you are able to deduct as an expense, rather than to depreciate, up to a specified amount of the cost of a new or used vehicle placed in service.

The 2013 Tax Year has a dollar limitation on the expensing deduction of $500,000 and the investment-based reduction in the dollar limitation starts to take effect when property placed in service in 2013 exceeds $2,000,000.

For tax years beginning after 2013, the maximum expensing limit is scheduled to drop to $25,000.  While it’s not likely Congress will allow the expensing limit and investment ceiling limit to drop this drastically, it is likely to legislate a reduction in 2013’s generous limits.

Bottom line is if it makes fiscal sense to accelerate purchases to be within 2013 you will likely save money on your tax returns. 

For more information about the professionals at BW James visit http://www.bwjames.com 

Avoiding Big Tax Surprises

This is a friendly note from Bob Martin, USN veteran with BW James LLP to inform you that if you had a significant change in your finances this year, such as a fluctuation of income or a major purchase, then it is best to make an appointment with you tax professional right now.

If there are changes in your life currently you should definitely review the impact it will have on you taxes to determine if you will owe more or less on your 2013 tax return.  After all, no one likes a big surprise on April 15th.

A higher-than-expected tax liability that you cannot immediately pay isn’t just costly, it can also be stressful.  Avoid those headaches now by visiting one of the tax professionals at BW James during the slow season so we can easily help you to accommodate and plan.  Getting a head start can allow you to begin a savings program or adjusting your payroll withholdings to prepare for the liability.  So avoid those April blues and start off strong today!

For more information about the professionals at BW James visit http://www.bwjames.com