Summer is here!
And the heat is on!
Even though regular tax season has ended, there is a lot to do and not just because the extended returns but because the new capitalization rules.
IRS issued final regulations on Capitalization vs. Repairs late in 2013, and some guidance in February of this year. Right in the middle of tax season!
Taxpayer could apply these new rules to their 2013 returns if they choose to, but they must comply with them with their 2014 returns. These rules affect any taxpayer who has equipment and/or real estate (fixed assets) in their trade or business. In some instances, we have seen that applying these rules pay off giving those taxpayers some unexpected deductions.
You should talk to your tax advisor before year 2014 ends and check how these new rules may impact you and your business. Or if you have extended your 2013 returns, you may want to explore if there is any benefit applying these rules to your 2013 returns.
I’ll be happy to assist you in the process of adopting these new rules. I love taxes!
Thank you to all our clients and friends for their referrals.
Julia Chong, CPA