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Practice Management > Building Your Business

House Passes Bill to Make Some Small-Biz Tax Breaks Permanent

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The U.S. House of Representatives passed on Thursday a resolution that would allow small businesses to deduct up to $500,000 in office equipment, as well as permanently extend other increased expensing limitations for small businesses.

H.Res. 101 – which passed with a 233-163 vote, with support from 232 Republicans and one Democrat – includes consideration of the America’s Small Business Tax Relief Act of 2015 bill (H.R.636) to permanently extend increased expensing limitations. The Senate does not currently have companion legislation.

This bill (H.R. 636) would amend the Internal Revenue Code of 1986 to permanently extend increased expensing allowances for depreciable business property, including:

  • the increased $500,000 expensing allowance for such property;
  • the increased $2 million threshold amount for such property over which the amount of the expensing allowance is reduced;
  • expensing of computer software; and
  • rules for the expensing of qualified real property (i.e., leasehold improvement, restaurant, and retail improvement property).

In a letter to the House last week, the Financial Services Institute expressed its support for this legislation, saying it would allow “small businesses, such as independent financial advisors, to make investments on new office equipment to help grow their businesses.”

FSI, representing independent financial advisors and independent broker-dealer member firms, many of which are small businesses, said that the bill would allow for these small business to make much-needed improvements.

“These are businesses that are strongly in need of these improvements, and without the security provided by H.R. 636, they might choose to not improve their office equipment because they fear that the tax rules that have been in place since the 1950s will no longer apply,” writes Dale Brown, president and CEO of FSI, in the letter. “This lack of action due to the uncertainty caused by the currently expired tax rules for small business write-offs will keep many small businesses from further growing our nation’s economy, thus necessitating the changes contained in H.R. 636.”

H. Res. 101 also includes consideration of the bill (H.R. 644) to permanently extend and expand the charitable deduction for contributions of food inventory.

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