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In mid-December, Congress passed bill HR 5771, with President Obama signing the bill into law on December 19 as the Taxpayer Increase Prevention Act of 2014 (TIPA). This Act extends and increases the first-year deductions for most fixed assets acquired in 2014. Yes, it is applied retroactively to January 1, 2014—so anything you purchased in 2014 may be affected.
Assume $100,000 of assets were placed in service in 2014 that have a 7-year tax life and which qualify for the bonus—such as machinery or furniture and fixtures.
Without the bonus ($100,000 / 7 years x 200% x ½ year convention)
With the bonus ($50,000 bonus + ($50,000 / 7 years x 200% x ½ year convention))
So a company can deduct $42,857 more on their tax return than before TIPA. Multiply $42,857 by the effective tax rate to estimate the cash flow savings.
Make sure you don’t pay one dollar more in taxes than you should. Sage Fixed Assets 2015 has all the required updates built into the already robust depreciation engine. Make sure you are using the right tool to get every dollar back.
Call us today at 800-368-2405.
Review all of your 2014 asset purchases and retroactively apply the 50% Bonus depreciation to all qualified assets, if doing so would maximize your tax situation.
Review your current tax situation to determine if it would benefit you to take advantage of the increased Section 179 expensing deduction.
For Sage Fixed Assets desktop customers, the “168 Allowance Switch” and the “Tax Expense” report are two features that will help you quickly apply the extended provisions.
Sage Fixed Assets 2015 includes all of these provisions and the ability to apply them. Don’t wait until it’s too late to take advantage of these savings.
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