Going, Going....... Boy, I hope not gone!

For a number of years we've relied on the generous bonus depreciation for a tax planning crutch.  Our growth company clients investing in new locations and equipment have seen cash flow without taxes for years because most of the new investment was able to be deducted against income even if the investment was capital borrowed.  Our more established clients have had the luxury of upgrading technology, facilities, trucks and equipment at a reduced effective cost because of the value of bonus depreciation and Section 179 expensing.

I'm sorry to say that these huge tax breaks are set to expire at the end of 2013 and, with all of the other political distractions,  we haven't heard any strong discussion suggesting extension.  We were in the same boat last year and congress did extend the benefit through 2013 so stay tuned. 

The action item is to accelerate your potential 2014 asset purchases into 2013.  This is not permission to buy an airplane that wasn't in your plans until today,  but if you were planning on sinking some money into your computer system, transportation fleet, tools, etc. during 2014, think about accelerating these purchases into 2013.  The deduction is available even if purchase money is borrowed.

We'll keep you posted.

Harvey