In years past, small business owners have been able to buy high-cost equipment their companies needed with the understanding that they would be able to write off those expenses at the end of the year. And after much uncertainty, it seems that this allowance – and a raft of others – passed in the 11th hour last week.
The Tax Increase Prevention Act of 2014 was signed into law by President Barack Obama after the U.S. Senate passed it 76-16, according to a report from the Jefferson City News Tribune. Now, business owners are once again able to deduct up to $500,000 in equipment purchases as long as they buy what they need by Dec. 31, 2014. Without the extension, that allowance would have dipped to just $25,000 – those in the sector were concerned about the potentially massive impact this would have had on small companies in particular.
Some criticism of the delay
As with just about any political dealing these days, there was a significant delay in getting these extensions passed, the report said. As a consequence, some experts say that there could be an unfair onus placed on owners who might have stayed out of the market for expensive equipment in the past year. That uncertainty suddenly breaking all at once, so close to the end of the year, could have them rushing to buy what their companies need before the end of the year.
“Now they’ve got 12 days to go out and buy this equipment,” Harold Krieger, of Krieger and Krieger Accountants and Tax Consultants in Jefferson City, told the newspaper. “If they have not purchased equipment before this bill was enacted and held back, it gives them very little time. It is a tremendous burden on the American business community, and it is absolutely a shame that Congress should wait this long to enact such an important measure.”
Owners who want to make sure their companies have the financial flexibility to navigate the often difficult waters of how Washington politics affect their companies may want to consider the benefits of finding more affordable small business insurance coverage. If they can find lower-cost commercial property insurance, for instance, they might be able to trim as much as a few thousand dollars from their bottom lines every year, and then devote those funds to other aspects of their companies.