Final repair regulations

November 21, 2014 Written by

This update courtesy of Paychex:
Final regulations for treating costs related to tangible personal property may open significant tax planning opportunities. For acquisitions of tangible property, a safe harbor rule allows taxpayers to deduct certain items. The safe harbor applies to items costing $5000 or less per item or invoice and are deducted on the company’s audited financial statements in accordance with a written accounting procedure. According to the final regulations, taxpayers must have a written policy in place at the beginning of the year. This is an annual election and thus can be changed annually. For companies without an audited financial statement, the safe harbor limit is $500 per item or invoice.

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Written by: Doug Rodrigues