Tax Legislation Update: The Small Business Jobs Act and Fixed Assets Management Miscellaneous Provisions
By Nancy Faussett, CPA
Publication Date: 10/05/2010
The Small Business Jobs Act of 2010 was signed into law on September 27, 2010. With the understanding that for small businesses to be able to expand, they need both tax cuts and greater access to loans, the Act creates new and expanded tax incentives and a $30 billion loan fund. The Act includes both tax incentives and revenue raisers to pay for them. This article describes two provisions that directly affect fixed asset management.
Start-up Expenses Modifications:
For tax years beginning in 2010, the amount allowed as a deduction for start-up expenses under IRS Section 195 is increased. A taxpayer may now deduct up to $10,000 (up from $5,000) of start-up expenses for years beginning in 2010. The phase-out threshold for the cumulative cost of start-up expenses (that is, the point at which the amount of allowable expenses is reduced), is increased to $60,000 (up from $50,000). The remaining Section 195 amount is amortized over 180 months.
Cell Phones Modifications:
For years beginning after 2009, cell phones are removed from the definition of listed property under IRS Section 280F. This means that the substantiation requirements and special depreciation rules that apply to listed property no longer apply to cell phones.
What You Should Consider
If you have a new business with start-up expenses, consider the following:
- The need to determine the deductible amount of Section 195 expense, taking into consideration the threshold amount and whether or not the deductible amount needs to be reduced, and
- The need to amortize any remaining Section 195 amount.
Related Info:
Changes in Bonus Depreciation »
Changes in Section 179 Expense »
Take Advantage of These Provisions with BNA Fixed Assets
The Small Business Jobs Act of 2010 includes a number of provisions that allow a business to claim valuable deductions. BNA Fixed Assets software provides comprehensive and up-to-date compliance management capabilities that allow you to take advantage of these tax law changes.
With BNA Fixed Assets, by entering any start-up expenses after the allowable deduction under Section 195, the state-of-the-art logic embedded in the solution will handle the amortization on the affected assets for the rest of their recovery period.
BNA Fixed Assets software can reduce the stress in your life, maximize your deductions, minimize your taxable income, and reduce your tax liability!
About BNA Fixed Assets Software
BNA Fixed Assets™ Software provides you with the ability to document your depreciation and amortization policies through Asset Type templates and allows you to automate the enforcement and implementation of these policies when performing data entry for fixed assets. This eliminates potential errors from misclassifying assets, automates the process of entering assets, enforces the use of a company’s depreciation and amortization policies, greatly reduces the volume of data required to enter each asset in the system, and, above all, guarantees compliance with GAAP rules and IRS regulations.
BNA Fixed Assets provides an annual automatic update of its fixed asset software as well as periodic updates as tax law changes. What’s more, the fixed asset management software speeds the data entry process by allowing you to copy and paste data for multiple assets from an Excel spreadsheet into BNA Fixed Assets, for greater efficiency and accuracy. With BNA Fixed Assets, you’ll benefit from having the best solution available on the market today to maximize productivity, comply with GAAP rules and IRS regulations, and meet all of your financial and tax reporting requirements.
Learn more about BNA Fixed Assets Software »
About BNA Software
Founded in 1983, BNA Software develops professional software solutions for tax, accounting, and financial planning professionals. With category-standard software including BNA Income Tax™ Planner and BNA Fixed Assets, BNA Software is the solution of choice for accounting, law, and financial planning firms, as well as corporations of every size. More than 60,000 customers including the IRS, depend upon BNA Software for the highest degree of tax, regulatory, and compliance expertise available in the market.
