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The Protecting Americans from Tax Hikes (PATH) Act of 2015 was passed and signed into law on December 18. This Act makes over 20 tax relief provisions permanent and extends for 2 years or 5 years a number of other tax relief provisions that had expired at the end of 2014.
Assume $100,000 of assets were placed in service in 2015 that have a 7-year tax life and which qualify for the 50% bonus—such as machinery or furniture and fixtures.
Without the bonus ($100,000 / 7 years x 200% x ½ year convention)
With the bonus ($50,000 bonus + ($50,000 / 7 years x 200% x ½ year convention))
So a company can deduct $42,857 more on their tax return than before PATH. Multiply $42,857 by the effective tax rate to estimate the cash flow savings.
Make sure you don’t pay one dollar more in taxes than you should. Sage Fixed Assets 2016 has all the required updates built into the already robust depreciation engine. Make sure you are using the right tool to get every dollar back.
Review all of your 2015 asset purchases and retroactively apply the 50% Bonus depreciation to all qualified assets, if doing so would maximize your tax situation.
Review your current tax situation to determine if it would benefit you to take advantage of the increased Section 179 expensing deduction.
For Sage Fixed Assets desktop customers, the “168 Allowance Switch” and the “Tax Expense” report are two features that will help you quickly apply the extended provisions.
Sage Fixed Assets 2016 includes all of these provisions and the ability to apply them. Don’t wait until it’s too late to take advantage of these savings.
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