KEY VOTE UPDATE: The U.S. House voted Thursday, June 12, to make permanent small-business expensing levels of $500,000. The bill passed by a vote of 272-144, with several dozen Democrats joining Republicans to support the measure. It is now up to the Senate to take up this legislation.
Business expensing (Section 179 in the tax code) allows small businesses to immediately deduct the full value of investments in equipment in the year that the investment is made, instead of depreciating the investments over time. This simplifies accounting and frees up cash to be reinvested in the business. There are limits, however, on the amount you can deduct in a year and on the types of property that qualify.
On Jan. 1 of this year, the increased expensing limits under the American Taxpayer Relief Act of 2012 expired. This caused the Section 179 expensing amount to drop to $25,000, without the ability to expense certain real property.
To help small businesses, higher limits and the inclusion of real property improvements should be made permanent. This will allow small businesses to plan for the future and expense additional investments, and therefore, enable those businesses to expand and create new jobs.
- Read NFIB's Key Vote letter to Congress in support of small business expensing.
- Read the Mult-Industry letter in support of small business expensing.
- Read NFIB's letter in support of H.R. 4457, the America's Small Business Tax Relief Act of 2014.
- Learn more about how you can take advantage of Section 179.
Small Business Expensing
- Download NFIB's Infographic on Small Business Expensing
- Download the Multi-Industry Letter on Small Business Expensing