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2021 Tax Deductions: Meal Categories
Confirm the assets of your business are being depreciated and properly capitalized. Often, your accountant might not be doing this properly. For example, a client owned a building that was not being depreciated or capitalized, and the accountant only had the rental operations on the books.
The IRS allows you to expense items under certain limits, for example, small tools and equipment. Your business has to set a reasonable policy for capitalization limits, then expense individual items using that limit. For example, if you establish $1,100 as the limit and buy a computer for $900, the computer is expensed rather than depreciated.
To qualify for percent bonus depreciation, the original user of the property must be the taxpayer and the property must be:
- Modified Accelerated Cost Recovery System (MACRS) property with 20 years or less of recovery period
- Water utility property
- Depreciable computer software
- Qualified leasehold improvement property
Similar to Bonus Depreciation, Section 179 allows you to expense in full your acquired assets (up to certain limits). Most equipment, such as furniture and fixtures (MACRS property) qualifies for Section 179 treatment.
Though there are limits on S-179 and bonuses, the savings ranges for your business can vary from $3000 to unlimited! There’s a huge cash opportunity in this depreciation, and I can help you maximize it:
Have your Tax Preparer been in touch with you to review how much in taxes you'll save this year?
If they have not, schedule a free zoom call today with one of our tax specialists, we’d love to help you reduce your tax bill.