The IRS issued final regulations in 2013 allowing businesses to expense certain purchases of tangible property under the de minimis safe harbor election. The threshold for expensing was originally set at $500 per item for businesses without applicable financial statements. The IRS has now raised that threshold to allow these businesses to expense up to $2,500 per item, and the IRS has stated they will not challenge any taxpayer who has used that $2,500 threshold. Businesses that conduct a financial statement audit can continue to utilize the higher $5,000 de minimis safe harbor amount (which remains unchanged).
Do you have questions regarding how the new threshold limits will affect your expensing? Contact us for more details.