New depreciation and capitalization rules allow small businesses who establish an accounting capitalization policy to expense equipment previously required to be capitalized, without subjecting it to any depreciation regulations.
In order to take advantage of the liberalized rules, taxpayers must adopt an ‘Accounting Capitalization Policy.’ Small businesses (businesses without audited financial statements) may choose to expense assets purchased so long as the asset does not exceed $500 per item.
A sample capitalization policy provided by our research service, Thomson Reuters, is available for your use below.
If you need assistance in determining what your Accounting Capitalization Policy should be, please contact our office.