Items costing $200 of less can be written off instead of being depreciated, the Service says in the newly issued final regulations. The prior ceiling had been $100. Taxpayers can elect to apply the higher deductibility threshold for 2012 and 2013.
Bigger ticket assets that aren’t supplies also can be written off in many cases. The limit depends on the policy that a firm uses for its financial books and records and whether it has a certified financial statement. Those with certified statements can elect to deduct items costing the lesser of $5,000 or the amount used for purposes of their final statements. Firms without audited statements are capped at $500.
See www.kiplinger.com/letterlinks/materialsfor the complete details on the rules. In upcoming Tax Letters, we will discuss additional rule changes in more detail.