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How does the PATH Act Affect Section 179 Expensing?

February 29, 2016

Section 179 expensing has been updated by the PATH Act- Read up on how the deduction will be treated in 2016.

The Protecting Americans from Tax Hikes (PATH) Act of 2016 extends many expiring tax breaks through 2016 and makes others permanent parts of the tax code. Included in the act are significant changes to Section 179 expensing that will affect businesses that have recently purchased equipment.

Changes to Section 179

Higher limits under Section 179 of the Internal Revenue Code (IRC) have been made permanent. This means that businesses are permitted to immediately expense the cost of qualified property in the year the property is placed in service.

In addition to this, the new law:

  • Allows a business to deduct up to $500,000 in qualified new or used property for 2015
  • Permanently allows off-the-shelf computer software to be considered qualified property
  • Expands qualified property definition further by including air conditioning and heating as well, which were previously excluded
  • Permanently allows taxpayers to apply sec. 179 expensing to qualified leasehold-improvement, restaurant and retail-improvement property

Read more about this and other changes to the tax code by downloading our eBook, “The PATH Act: What Taxpayers Need to Know”.

Questions? Contact any member of our Tax Services Team.

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