Top Legal and Financial Services in Stanwood, WA 98292
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Frontier Bank
By Noel Freedman January 30, 2009
I retired my Real Estate license after selling new homes for 43 years in King and Shohomish County. Tell your boss to contact me. I have the answers how to get rid of these For Sale new homes: . I inow the territory: Nnationwide Noel Freedman 8007 283rd St. NW Stanwood, WA 98292 NoelnBetty@aol.com ...read more
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Depreciation: What is it and why should I care?
Depreciation is the gradual recognition that the value of a certain object has declined. The major reason for utilizing depreciation is that it allows you to write down a purchase over a period of years. This period is normally 3-15 years with buildings and land having a significantly longer period. The premise here is that when you buy an object it will, in the normal course of business, wear out over a certain amount of time. A good example is an office chair; used regularly the chair will wear out or break in approximately 5 years. The Internal Revenue Service has laid out a chart that specifies how long each type of property can be depreciated. Using our example of the chair, if it cost $1000 and we did decide to depreciate it, $200 could be written off as a depreciation expense in each of the next five years inclusive of the purchase year. There is a major exception to the depreciation requirements, it is called Section 179. This refers to the part of the I.R.S. code where the rule is found. Under Section 179 provisions, businesses can completely write off the asset in the year of purchase. This allows for a much greater tax deduction in the current year. There are limits to the dollar value that can be written off using Section 179 every year, the limit reached $100,000 in 2003 and has been adjusted upwards for inflation since then. The reason that a business would care which method is used derives mainly from need based on tax burden. If your business is just starting and you will have notaxableincome in the current year, but you expect to in the coming years. Then your best option would be to depreciate over the longest period of time available to you. But, if you have an unforeseen bubble of tax burden that you do not expect to occur in the future, then Section 179 might be a viable alternative. Items, regardless of cost, that you expect to wear out or consume in less than one year, should just be expensed in the current year. ...read more
By OOKKEES.com January 25, 2010