The Internal Revenue Service has released a set of frequently asked questions and answers in an effort to clarify its tangible property repair regulations.
In 2013, the IRS issued its long-awaited repair regulations with rules for how businesses can deduct or not deduct the costs of certain materials, supplies, repairs and maintenance. Last month, the IRS issued a new revenue procedure with the goal of making it easier for small business owners to comply with the final tangible property repair regulations (see New IRS Procedure for Repair Regulations Reduces Burden (for Some) and IRS Eases Repair Regulations for Small Businesses).
However, the repair regs remain daunting to many practitioners and the changes don’t apply to many businesses (see AICPA Recommends Changes to IRS Tangible Property Regulations).
The new FAQ page that was added Thursday to IRS.gov, on tangible property frequently asked questions, provides a brief summary of some of the key elements of the tangible property regulations and includes information on simplified procedures for small business taxpayers.
Among the questions addressed are whether the tangible property regulations apply to a business, what is the de minimis safe harbor election, and when can a business deduct the costs of materials and supplies.
Separately, the Internal Revenue Service added three revised publications to IRS.gov this week of interest to business and individual taxpayers to help them understand how to determine various depreciation and pension options:
Publication 946, How to Depreciate Property, explains how to recover the cost of business or income-producing property through deductions for depreciation. The publication was updated to reflect the extension of expiring tax provisions in legislation signed into law on Dec. 19.
Publication 4587, Payroll Deduction IRAs for Small Businesses, explains that individuals saving in a traditional IRA may be able to receive some tax advantages on the money they contribute, and the investments can grow tax-deferred.
Publication 4334, SIMPLE IRA Plans for Small Businesses, explains how a SIMPLE (Savings Incentive Match Plan for Employees of Small Employers) IRA plan offers great advantages for businesses that have 100 or fewer employees (who earned $5,000 or more during the preceding calendar year) and that do not have another retirement plan.
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