Tax Reform: Changes to Depreciation Affect Businesses Now
Business Tax Returns
The IRS reminds businesses that the passage of the Tax Cuts and Jobs Act may affect their depreciation deductions and taxes.
Business taxpayers can generally depreciate tangible property except land, including buildings, machinery, vehicles, furniture and equipment.
Changes to depreciation and how they will affect businesses may include:
- Businesses can immediately expense more under the new law; taxpayers may elect to expense the cost of any property and deduct it in the year the property is placed in service.
- Maximum deduction increased from $500,000 to $1 million.
- The phase-out threshold increased from $2 million to $2.5 million.
- The new law allows taxpayers to elect to include improvements made to nonresidential property. The improvements must have been made after the date the property was first placed in service.
These improvements include:
- Any improvement to a building’s interior
Heating and air conditioning systems
Fire protection systems
Alarm and security systems
Improvements that do not qualify:
- Enlargement of the building
- Service to elevators or escalators
- Internal structural framework of the building
Alfredo Gaxiola has worked on numerous IRS problem cases and has successfully settled with the IRS to release liens on houses, bank accounts and wages and, if needed, setting a payment installment plan that is not burdensome for the client. He has conducted appeals before the U.S. Tax Court and obtained favorable resolutions in reducing the tax debt of his clients. Mr. Gaxiola served as Treasurer of Camara de Empresarios Latinos, one of the largest and strongest Hispanic organizations in the city of Houston. He has conducted financial and accounting seminars for the Houston Small Business Development Corporation, as well.
Business Tax Returns.
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