J.K. Lasser's Small Business Taxes 2015: Your Complete Guide to a Better Bottom Line

CHAPTER 14 First-Year Expensing, Depreciation, Amortization, and Depletion

1. First-Year Expensing
2. Other Expensing Opportunities
3. General Rules for Depreciation
4. Modified Accelerated Cost Recovery System
5. Depreciation Methods
6. Bonus Depreciation
7. Limitations on Listed Property
8. Rebuilding Incentives for Certain Disaster Victims
9. Putting Personal Property to Business Use
10. Amortization
11. Depletion

 

Alert

At the time this book was printed, Congress had not extended numerous breaks for 2014 that had expired at the end of 2013. Check the online supplement in February 2015 at www.jklasser.com or www.barbaraweltman.com to see whether these breaks apply for 2014 returns.

First-year expensing, which is also called the Section 179 deduction after the section in the Tax Code that creates it, is a write-off allowed for the purchase of equipment used in your business. This deduction takes the place of depreciation—the amount expensed is not depreciated. For example, if you buy a used computer for your business for $2,500, you can opt to deduct its cost in full in the year you place the computer into service. If you don't make this election, you must write off the cost over a number of years fixed by law.

Depreciation is an allowance for a portion of the cost of equipment or other property owned by you and used in your business. Depreciation is claimed over the life of the property, although it may be accelerated, with a greater amount claimed in the early years of ownership. The thinking behind ...