Lame Duck Congress Faces Section 179 Expensing Extension, Tax Extenders

The Election Day takeover of the Senate by the Republican Party might boost the morale of farmers and small business owners advocating for revised tax policies, but the work likely will rest on the shoulders of the lame duck congress, the National Farmers Union suggested Wednesday. The section 179 provision in previous tax years has allowed farm businesses to take the full depreciation deduction of an item that meets certain specifications – in many cases machinery – in the current tax year, with a maximum deduction of $500,000 and a phase-out threshold of $2 million. That deduction level, however, has fallen to $25,000 with a $200,000 phase-out for 2014, and will remain that way unless Congress acts on tax reform or a "tax extenders" package before the end of the year. Without higher expensing levels under section 179, farmers may be slower to make needed equipment purchases, which is why NFU President Roger Johnson on Wednesday said his organization is ready to make the case for an extension. The Senate package advocates for a two-year reinstatement of the $500,000 section 179 expensing level, and while it has been approved in Committee, it has not moved on for consideration by the full Senate. The entire House, however, has addressed the section 179 issue, approving in June a package that included permanent restoration of section 179 to the $500,000 level...more