Self-employed taxpayers who use the cash method of accounting can pay bills on or before Dec. 31, 2014, and claim the expense on their return. That makes now a good time to stock up on necessary supplies and equipment.
Remember to take advantage of the section 179 deduction for computers and other big-ticket items put into service before the end of the year. The section 179 deduction for 2014 is back at up to $500,000 now that the house and senate voted to extend tax credits that had expired in 2013 and President Barack Obama signed the bill into law. Without an extension, the deduction would have dropped to $25,000.
The $500,000 deduction extension is good only for 2014, so it’s important to make those purchases and put the items into service before the end of the year.
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