Expensing Deduction: Boon for Small Business Owners
Small Business and Deduction
Small business owners who purchased business equipment or other capital assets that were put into service in 2004 may qualify for a large tax deduction. According to the Colorado Society of CPAs, this is the result of Uncle Sam extending tax rules that have significantly increased the small-business expensing limit.
EPRECIATION VERSUS EXPENSING
Typically, business property must be depreciated over a number of years, since the asset's usefulness to the business extends beyond the year it was purchased. Using the depreciation schedules, it can take many years for small business owners to fully realize the tax deduction.
Under the Section 179 expensing allowance, small businesses that qualify may expense