Authored By Daniel Smith, Shareholder
H.R. 4457 has passed the House of Representatives on June 12, 2014. If it passes the Senate and is signed by the President, the Internal Revenue Code will be permanently amended to extend increased expensing limitations. When enacted, this act will allow certain small businesses to expense up to $500,000 of depreciable property under Section 179.
Under this pending law, limitations under Section 179 will be adjusted for inflation. Cost-of-living adjustments are to be determined each year and will be rounded to the nearest multiple of $10,000.
Businesses owners will welcome this extension of increased Section 179 deductions. Without this change the current law limits Section 179 to $25,000 in 2014 (adjusted for inflation). H.R. 4457 will give small businesses more opportunity to compete. They will be able to expense capital purchases needed for their businesses. Absent this change, small business owners are limited in the amount of current deductions they can take as deprecation.
All will welcome the passage of this law. In the coming weeks, look for the enactment of these changes to Section 179 of the Internal Revenue Code.