An update from NAED Vice President of Government Affairs, Ed Orlet, on the status of Section 179.
The US House is expected to vote this week on legislation to make higher Section 179 expensing levels permanent. Sponsored by Congressman Pat Tiberi (R-OH 12), America’s Small Business Tax Relief Act of 2015 (H.R. 636) will promote certainty for small businesses as they consider decisions about investing in equipment and software. In recent years, Congress has resorted to short term extensions to set maximum expensing levels under Section 179. This makes planning for investments extraordinarily difficult.
Under current law, Section 179 of the US tax code allows businesses to deduct the full purchase price of qualified equipment (such as business vehicles, office furniture, computers and some software) financed during the tax year. The maximum amount allowed expense for the 2015 tax year is $25,000. The increased limit in place for 2014 was $500,000 with a cap of $2 million before the deduction is phased out. The cap for 2015 has dropped to $200,000. H.R. 636 would set the 179 limits at $500,000 and $2 million and would index them for inflation.
CLICK HERE to tell your member of Congress to support H.R. 636.