Can you identify the group of clowns? This year there are some very important tax issues that have billions of dollars worth of business decisions riding on whether or not they will be extended past December 2013 (their expiration date without any extension).
Congress has not acted on these important tax planning laws. Most expect that they WILL be extended to retroactively cover all of 2014. But “expecting” is not the word you feel confident using if you are planning business moves with your hard-earned dollars.
One example is the deduction known as “Section 179 expensing.” This allows small businesses to write of the cost of fixed assets used in business that have useful lives under 20 years up to $500,000 per year under some circumstances. So a business owner who needs a new machine in his factory might be able to afford this purchase IF he gets a huge $500,000 tax write-off.
But as of now, the $500,000 limit we all “expect” is only $25,000 per the law at this time without the 2013 limit being extended.
Can you see how this can slow the wheels of commerce? A $500,000 sale may not occur, thanks to a tax law that is “in limbo.” Thanks to our glorious congressmen.
Two years ago tax planning was going nuts when congress didn’t just wait until December 2012 to extend, write and clarify the tax rules for the previous twelve months, they actually passed the retroactive extensions on January 2nd, 2013. Many clients and their planners were on pins and needles.
So can you spot the clowns? Those that allow the printing of trillions of dollars but can’t manage the immediate tax law issues are running a circus. But nobody is laughing!