Increase in De Minimis Safe Harbor Threshold
The tax law allows companies to make an election to expense certain “de minimis” purchases of equipment and other tangible property. The IRS recently announced an increase in the expensing threshold for taxpayers that don’t have “applicable financial statements” — generally, financial statements audited by a CPA. For these taxpayers, the deductible amount is raised from $500 to $2,500 per invoice (or per item as substantiated by the invoice). For taxpayers with the applicable financial statements, the limit remains $5,000 per invoice or per item. The new $2,500 amount applies to costs for tax years beginning on or after January 1, 2016. Other requirements apply.
The Cost of Doing Business
U.S. businesses spent an average of $31.70 an hour per employee in wages and benefits in December 2015, according to data released by the U.S. Department of Labor’s Bureau of Labor Statistics. Wages and salaries accounted for 69.8% of total hourly compensation, while benefits accounted for 30.2% of the total. Benefits include paid leave, supplemental pay, insurance, retirement and savings, and legally required benefits.
