As usual in the tax world the answer to this question depends on your situation. An exciting update to the de minimis safe harbor election allows taxpayers to deduct expenditures that were previously required to be capitalized. This rule allows up to $5,000 expenditure maximum for taxpayers with audited financial statements; up to $500 for taxpayers without audited financial statements. Having a written policy can allow you to expense up to the $500. Otherwise, those without a written policy, using the election, can still expense items $200 or less (used to be $100) as materials or supplies. This update applies for years starting after December 31, 2013 and the written policy must be in place before the first day of the year. For more information & analysis of the changes click here, and be prepared for an exciting chat with your tax planner.
Give us a call at 888-564-5777 and we will work with your tax advisor to update your books reflect the right policy for your company.