The Protecting Americans from Tax Hikes Act of 2015 made several tax incentives permanent. Among the most beneficial for businesses is the Section 179 expensing limitations and phase-outs. The new thresholds allow $500,000 of immediate expensing of qualified business equipment, with a phase out of $2,000,000. If you are planning on making some big equipment purchases by year end, you will be able to write-off the entire purchase (or any portion) on your 2016 income tax return.
A separate provision allows 50% of the cost of improvements to be written off under “bonus depreciation”. This provision was extended for five years.
And, another permanent change allows retailers and restaurants to depreciate remodeling and other improvements to their stores over 15 years, rather than the previous standard of 39 years.