IRS Makes it Easier for Small Businesses
Effective January 1, 2014, the IRS set new rules and regulations governing:
• Definition of fixed assets vs materials and supplies
• The expensing of materials and supplies
• Specific rules for depreciation amounts and guidelines
• What costs may be depreciated on asset purchases
• Determination of certain costs as repairs (expensed) or improvements (depreciated)
• When to recognize disposals, including partial dispositions
• Valuation and accounting methods for partial dispositions
• How to define a “Unit of Property”
• Policies and filing requirements for IRS compliance
Each business (rental included) must have a Repair Regulations Policy – written – within their organization. If the organization already has a policy – please let me know so we can document your policy. If not, please complete the attached example policy and return a completed policy to me for my records. Retain a copy for your records.
Failure to adopt these regulations could result in lost tax breaks and sanctions for non-compliance.
How To Comply | Additional Forms: Most taxpayers with a business or rental property will have additional filing requirements for 2014 in order to adopt these changes. There will also be additional time and review in preparing your return to ensure compliance, related to (1) accounting review and analysis, (2) establishing accounting methods, procedures, and policies, (3) determining compliance with the new rules, and (4) preparing tax return statements, elections, and additional forms required by the IRS.
Posted on Fri, February 13, 2015
by Kitty Jordan