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.
Last December, the president signed H.R. 5771, which restored the small business expensing level to $500,000 for tax year 2014. Unfortunately, this bill did not permanently restore the expensing limit. Therefore, at the beginning of this year, the expensing limit reverted to $25,000. Unless Congress acts to increase the level back to $500,000, small business owners will be faced with a massive tax hike.
On November 4, NFIB sent a letter to Congressional Leadership asking for immediate action on this issue, noting that the current pattern of Congress acting at the last possible minute is "neither predictable for the business owner nor beneficial for the economy." The full letter can be found here.
If Congress permanently increases business expensing, a new study by the NFIB Research Foundation projects there would be 197,000 more jobs and $18.6 billion in higher economic productivity.View the study »
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. NFIB urges Congress to take action and permanently extend the 2014 Section 179 expensing levels.
- Letter of Support to Permanently Restore Small Business Expensing — Nov. 4, 2015
- NFIB Letter Urging the Senate to Make Small Business Expensing Permanent — July 9, 2015
- NFIB's Key Vote letter to Congress in support of small business expensing
- NFIB's letter in support of small business expensing for the 114th Congress
- Multi-Industry letter in support of small business expensing
- NFIB's Letter of Support for S. 1141, Small Business Tax Certainty and Growth Act
- NFIB's Letter in Support of H.R. 4457, the America's Small Business Tax Relief Act of 2014
- STUDY: Boost in Jobs and Productivity from Permanently Increasing Expensing
- INFOGRAPHIC: Small Business Expensing
FOR YOUR BUSINESS: How to take the Section 179 tax deduction »