You might have heard talk about the revival of “bonus,” or special, depreciation for big business purchases. It was lucrative. Until it ended last Dec. 31, taxpayers were able to take a 50 percent write-off from the cost of business equipment in the first tax year of use, far more than normal depreciation.
The U.S. Senate did move to bring it and many other federal tax breaks back to life through 2015 with the Expiring Provisions Improvement, Reform and Efficiency Act of 2014 – nicknamed “EXPIRE” for fun. The bill even won a motion putting it up for consideration in the full Senate.
But nothing has happened since May. It seems the Senate’s attention to EXPIRE has expired for the time being.
So, while 50 percent bonus depreciation still is possible, it also is languishing a long way from your 2014 business tax return. You may want to factor that in to equipment buying decisions in the last half of the year.
P.S. In recent years, Minnesota business taxpayers were required to add back 80 percent of this depreciation to state tax returns.
Want to explore some equipment buying scenarios for your 2014 taxes? We’re ready to help. Call or email us at EricJohn Ltd.