It’s that time of year when articles appear filled with old chestnuts about this or that task to complete by year-end to get your financial house in order. Recently I presented some year-end planning items in a webinar to a group of accountants, and in this and the next couple posts, will share with you some highlights. I’m going to skip much of the usual stuff and focus on items that many might not mention but which might be useful to you.

This first post is general housekeeping and a few tax items.

Speaking of Stock Options

Section 179 Deduction

If you’re a small business owner, you can deduct up to $500,000 in capex expenses if a) you are profitable b) the deduction cannot exceed the year’s profit but can carry-forward and c) your total capex spending for the year is under $2-2.5 million. This allows the full deduction of the capex cost in year one instead of spreading out the depreciation deduction over the useful life of the asset (5+ years). There’s also a 50% bonus depreciation deduction on new equipment above the $500,000 limit as well, and can be used for a tax loss. The Taxpayer Relief Act of 2012 passed in January also raised the 2012 limit form $125,000 to $500,000, so it may pay to amend your 2012 return. Next year, the section 179 amount drops back down to $25,000, unless congress acts. Meanwhile, you should act if this is applicable.

It’s open enrollment season, so next time we’ll talk about employee benefits and everyone’s favorite topic, health insurance.

Michael Lonier, RMA℠

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