Nearly every year the tax code goes through significant changes. These changes are due primarily to the fact that political wrangling has trumped solutions to problems within this country. As a result, both political parties have figured out, that rather than solve the problems created by their own movements, and the harsh economic effects; finger pointing and delayed decision making, can insulate them from harsh criticism (preserving their own job = good for them). The result; rather than providing for long-term solutions to a snowballing problem of high government spending, coupled with lower government revenue, due to tax breaks to the highest earners and significantly lower actual earnings and employment levels for the lowest earners, we have a system where major changes to the tax code are nearly an annual occurrence. The only reason taxpayers have payed little attention is due to the fact, that by and large, Congress has swept through and extended nearly all the tax breaks from previous years, even if it does take nearly all year in some cases to push these tax breaks through (making tax planning a nail-biting endeavor).
Anyway, now that I have that out of my system I can focus on the real point of this post. Due to expiring tax breaks, 2012 and 2013 are very significant tax years. Without basic extensions of existing tax structure items, the tax landscape will be radically different in 2014. Here are some major tax changes in 2012, that will affect your business (unless Congressional action is taken):
1. Major changes to 179 depreciation.
A. Unlike 2011, there are no special depreciation provisions for the following types of property: Qualified leasehold improvements, Qualified restaurant property, and qualified retail property.
B. Also the expending limit and qualifying property thresholds are significantly lower in 2012. The amounts are now $139,000 and $560,000 respectively, down from $500,000 and 2,000,000 in 2011. Please remember these amounts still carry the normal income and other restrictions.
2. Major changes to Bonus Depreciation.
The special depreciation rate (168k Depreciation, as it is otherwise known) is 50% for qualifying property placed in service in 2012. This is down from the 2011 rate, which was a much more favorable 100%, for qualifying property (with certain restrictions).
See part 2 of this discussion later on in the week...
Please note these items are likely to change throughout the year, as changes occur, I will not update this post, but will post subsequently! Please look for subsequent updates.
Anyway, now that I have that out of my system I can focus on the real point of this post. Due to expiring tax breaks, 2012 and 2013 are very significant tax years. Without basic extensions of existing tax structure items, the tax landscape will be radically different in 2014. Here are some major tax changes in 2012, that will affect your business (unless Congressional action is taken):
1. Major changes to 179 depreciation.
A. Unlike 2011, there are no special depreciation provisions for the following types of property: Qualified leasehold improvements, Qualified restaurant property, and qualified retail property.
B. Also the expending limit and qualifying property thresholds are significantly lower in 2012. The amounts are now $139,000 and $560,000 respectively, down from $500,000 and 2,000,000 in 2011. Please remember these amounts still carry the normal income and other restrictions.
2. Major changes to Bonus Depreciation.
The special depreciation rate (168k Depreciation, as it is otherwise known) is 50% for qualifying property placed in service in 2012. This is down from the 2011 rate, which was a much more favorable 100%, for qualifying property (with certain restrictions).
See part 2 of this discussion later on in the week...
Please note these items are likely to change throughout the year, as changes occur, I will not update this post, but will post subsequently! Please look for subsequent updates.
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