Fixed asset and depreciation allowances in 2012
January 30, 2012
Politicians are reticent to make tax decisions during an election year, but some provisions will expire or be reduced if Congress doesn't take action, the New England Real Estate Journal reports.
For example, under the rules of bonus depreciation
, companies were allowed to deduct 100 percent of depreciation on qualifying fixed assets
last year - a figure that dropped to 50 percent in 2012. The allowance is set to be eliminated in 2013 unless Congress steps in.
Section 179, which allowed companies to deduct up to $500,000 toward the cost of fixed asset
items such as vehicles, furniture and machinery in 2011, also had its deduction allowance decreased this year to $139,000. Next year, it's set to fall further, to just $25,000.
Qualified leasehold improvements - which the news source defines as "improvements to the interior of commercial real property that meet certain qualifications" - also saw a change in 2012. Last year, they had a 15-year depreciable life. This year, that changed to 39 years.
Staying up to date with changing legislation can be a difficult task. Offerings such as Sage FAS Fixed Asset Accounting
Software automatically update in accordance with new allowances, taking the onus to keep up off companies themselves.