05/ 26/ 2006
NFIB won a victory for its members when Congress agreed last month to extend Section 179 expensing and the alternative minimum tax patch for two years.
Tax cuts passed during the last Congress increased the amount of new investments a business can expense in a given year from $25,000 to $100,000. The law also increased from $200,000 to $400,000 the amount of total investments a business can make in a year and still fully qualify for expensing under Section 179. The legislation was scheduled to expire after 2007, but the most recent action extends the cuts through 2009.
"Allowing small firms to immediately expense critical investments has proven to be a key component of our economic recovery and continued expansion," says Dan Danner, NFIB's executive vice president. "We look forward to working with Congress in the upcoming years to make these increased small-business expensing limits permanent."
The AMT is a growing concern as it causes additional burdens for small-business owners when filing their taxes and complicates deducting interest on loans that small businesses use for purchases often made under Section 179.
