Publication date: 11/01/2004
Nov. 4, 2004: Tax Relief Package To Benefit Contractors
November 4, 2004
FALLS CHURCH, Va. - President George W. Bush has signed into law a tax relief package that provides several benefits to contractors, according to the Plumbing-Heating-Cooling Contractors-National Association (PHCC).
First, the legislation extends for an additional two years the ability to increase to $100,000 the amount small businesses may expense annually, but limits opportunities to use the increased expensing for certain vehicle purchases. The provision expires in 2008.
The legislation also reduces from 39 to 15 years the depreciation period for qualified leasehold improvements. Leasehold improvements include retrofits and changes/modifications to property. If one performs work on a restaurant, for example, such property would also be depreciated over a 15-year recovery period.
Rules regarding S Corporations have been reformed and simplified, but a tax planner should be consulted for specific benefits.
There are also new rules regarding mobile machinery and when such equipment will be subject to taxation. Such new rules will be included in a U.S. Treasury proposed rulemaking.