The IRS has increased the maximum threshold for expensing certain capital items under the De Minimis Safe Harbor from $500 to $2500. The increase is in reponse to CPA comments that the $500 limitation was too low to effectively reduce the adminitrative burden of capitalizing the cost of many commonly purchased items such as furniture, computers, phones, and small equipment. This rule goes into effect tax years on or after January 1, 2016. Furthermore, if taxpayers are using a threshold higher than $500 but less than $2500 for tax years beginning after December 31, 2011 and ending before January 1, 2016 the IRS will not focus on this issue in an examination. Please contact us if you have questions or want specifics to your situation. This post is designed to provide a basic overview.
