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Does Your Business Qualify for Retroactive Tax Deductions?
Posted in Tax and Finance

The American Taxpayer Relief Act of 2012 has a huge impact on businesses and business owners, many of which could realize significant tax savings.

One example is the retroactive increase and extension for expensing amounts for Section 179 depreciable property:

Prior to the 2012 Taxpayer Relief Act being passed, the maximum allowable Section 179 expense for a business for the 2012 tax year was to be $139,000, and such amount would have been reduced (phased out) by the amount by which the cost of Section 179 property placed in service during the year exceeded $560,000. For tax years beginning 2013 and beyond, the dollar limitation would have been $25,000 and the phase-out amount was $200,000.

The new law retroactively increases the Section 179 expense limitation to $500,000 and the beginning phase-out amount to $2 million for 2012. It also extends these levels to costs of Section 179 property placed in service during the 2013 tax year.

Since this new law retroactively applies to property purchased in 2012, businesses that are in the process of preparing their tax returns for 2012 should be sure to take advantage of the increased Section 179 deduction.

To learn more about Ross Cohen and his practice, please visit his profile.

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  • Partner

    Ross D. Cohen serves as Co-Leader of the Federal Tax Team and concentrates his practice on federal tax transactional and planning issues of partnerships, joint ventures, limited liability companies and S and C corporations.

    With ...

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