Congress extends tax benefits on equipment purchased in 2014

Congress extends tax benefits on equipment purchased in 2014

Some tax credits and deductions that expired at the end of 2013 were restored in a bill recently passed by Congress, but they will expire again at the end of this year. Dealers may be able to expense a larger portion of equipment purchases for 2014 if they are bought by December 31.

The bill, H.R. 5771, raises the limit on business equipment that can be expensed under Section 179 for small businesses from $25,000 to $500,000. NADA says the bill also extends the 50 percent bonus depreciation deduction for new business equipment bought and put into service in 2014.

For your business customers, the bill extends the additional $8,000 in first-year depreciation for certain business vehicles bought this year. Again, to qualify, the vehicles must be purchased by December 31, 2014.

An earlier version of the bill would have made the tax provisions permanent, but President Obama threatened a veto. He has signed this bill, which has NADAês strong support.

This article is not intended as accounting or tax advice. Dealers should consult their tax advisor about their particular circumstance.

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