Here are two tax words that you have to love: safe harbor.
Here are six more tax words that you have to love: tax-favored expensing with no recapture.
To create and protect your safe harbor expensing, you make a formal election on your tax return to use the de minimis safe harbor to expense assets costing $2,500 or less ($5,000 with applicable financial statements, as explained later).
This wonderful safe harbor election eliminates the burden of tracking those small-dollar assets, depreciating and/or Section 179 expensing them in your tax returns and books of account, and then making sure to remove them from your books when you remove the assets from your business.
The term “safe harbor” means that the IRS will accept your expensing of the qualified assets if you properly abided by the rules of the safe harbor. ... Log in to view full article.