Many folks have come to know and love the Internal Revenue Code’s “Section 179” deduction. Under this rule, tangible personal property which would otherwise be capitalized and depreciated over several years can be written off in full in the year the property is purchased and placed in service.
And indeed, the deduction has been quite generous in recent years – allowing taxpayers to deduct expenditures of as much as $500,000 in the acquisition year. But unless Congress takes action to retroactively restore this generous allowance to property purchases after December 31, 2014, the limit drops from $500,000 to $25,000! So if you bought that fancy machine in January or later of this year, get on the horn to your Congressman and insist that he and his cronies extend this provision, lest you be stuck with only a measly depreciation deduction for this year’s expenditure.Read More
Recall that some dependent children must file a Form 8615 with their tax return, and subject unearned (generally, investment) income to income taxation at his parents’ tax rate. The form must be filed for any child who meets all of the following conditions:
- The child had more than $2,000 of unearned income.
- The child is required to file a tax return.
- The child either was under age 18 at the end of the tax year, or was age 18 at the end of the year and did not have earned income that provided more than half of his support, or was a full-time student at least age 19 and under age 24 at year end and did not have earned income that provided more than half of his support.
- At least one of the child’s parents was alive at the end of the year.
- The child does not file a joint return.Read More