- December 21, 2015
- Posted by: Nicholas Fitch
- Category: Uncategorized
Business owners love tax deductions (don’t we all). Unfortunately, congress waits until the very end of the year to pass their budget, which includes the status/fate of many important tax deductions small business owners count on each year. The biggest of which is Section 179, which allows accelerated depreciation for equipment placed in service during the 2015 tax year. ‘The Protecting Americans from Tax Hikes Act of 2015’ passed both the United States House and Senate and is set to be signed into law — increasing the Section 179 deduction limit to $500,000 from the previous limit of just $25,000. The increased limit of $500,000 is a permanent increase, and for the first time, allows for eligible small businesses to claim the credit against the alternative minimum tax liability or against the employer’s payroll tax liability.
‘The Protecting Americans from Tax Hikes Act of 2015’ also extends the Work Opportunity Tax Credit, the New Markets Tax Credit and bonus depreciation for five years and extends the remaining extender provisions as well as most of the energy provisions—including the Section 179D tax deduction for energy-efficient commercial buildings—for two years. Section 179D allows eligible energy efficient commercial property owners up to a $1.80/sq ft deduction for reducing energy consumption in their facility. The extension of Section 179D will provide a nice boost to the LED lighting industry, where lighting retrofits often reduce a facility’s lighting costs by 65-75% or more.