January 20, 2013
In Part I, we focused on the Act's impact on individual taxpayers. Part II highlights the Act's impact on business taxpayers.
A number of popular business tax provisions were scheduled to expire at the end of 2012 such as small business expensing under Internal Revenue Code Section 179. The Section 179 limits were increased retroactive to January 1, 2012 and extended through 2013. The dollar limit for both years for expensing is $500,000 and there is a $2 million investment limit. Also, the 15-year recovery period for qualified leasehold improvements, retail improvements and restaurant property are available through the end of 2013.
Many other business tax benefits that had expired or were set to expire were extended through 2013, including:
- 50% bonus depreciation
- Section 41 research tax credits
- Work Opportunity Tax Credit for hiring veterans and others who meet specific criteria
- 100% exclusion for gains on a sale of small business stock
- Special tax incentives for businesses in empowerment zones
- Rules on S corporations making charitable donations of property
Small business owners should also review Part I to determine how their personal tax situation is impacted by the Act.
As always, if you have questions or would like to discuss your specific situation, please contact our office.