A Slow Slog to the Finish Line on Section 179
As usual, Congress continues to dither on any tax extender bill for 2015. The tax extender bill would likely have Section 179 at $500,000 and 50% bonus depreciation on new purchases.
Senator Orrin Hatch (R-UT) has indicated that a one-year extension similar to last year will not work. President Obama and Rep. Nancy Pelosi (D-CA) have also indicated that a tax extender bill is likely dead-on-arrival unless certain changes are made to the Earned Income Tax Credit and making the American Opportunity Credit permanent (if other business friendly provisions are made permanent).
If all of the provisions are made permanent, the estimated cost to the federal budget over a 10 year period could exceed $800 billion. Section 179 effect is only about $3 billion of that total.
Congress is trying to adjourn next Friday the 11th, but the fight over tax extenders may go beyond that deadline. If you have made large equipment purchases this year and have uncertainty on Section 179, see this post on how you might plan for it.
We will keep you posted on the status of the tax extenders if it changes (hopefully for the positive).
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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