Say Hello to a Permanent $500,000 Section 179

December 21, 2015 03:12 PM
 
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Farmers who have been anxious about the status of Section 179 can now breathe easier. President Obama signed legislation that addresses the matter on Friday, Dec. 18, as part of a $622 million package of tax extenders.

“One of the key provisions for farmers is to make Section 179 permanent at the $500,000 level,” says accountant and Farm Journal columnist Paul Neiffer. “Once equipment purchases total $2 million, then the allowed Section 179 amount will start to phase-out dollar-for-dollar and no more will be allowed after $2.5 million. Additionally, the amount will be indexed to inflation in $10,000 increments.  Starting with tax years beginning in 2016, air conditioning and furnace units will also qualify for Section 179.”

Read more of Neiffer’s analysis on Section 179 here.

“This tax extender package gives farmers and ranchers critical tools to help them reinvest in their businesses,” says American Farm Bureau Federation president Bob Stallman. “New provisions will let our members make important upgrades that reduce costs, increase efficiency and help make their businesses sustainable for generations to come.”

The Section 179 extension is considered permanent.

For a free online resource that includes information on Section 179, FAQs, an interactive calculator and more, visit www.section179.org for details.

Additionally, signed into law last week was a massive $1.1 billion omnibus appropriations bill. According to the House Appropriations Committee, the legislation provides funds for various agriculture agencies and efforts, including:

  • $2.94 billion for agricultural resource programs.
  • $898 million for Animal and Plant Health Inspection Service (APHIS).
  • $1.51 billion for Farm Service Agency (FSA).
  • $2.8 billion for rural development programs.
  • $864 million for Natural Resources Conservation Services.
  • $130 million for disaster aid for flooding and other natural disasters.

The omnibus appropriations bill also keeps the government running through September 2016.

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Comments

 
Spell Check

PullMyFinger
Chappell, NE
12/21/2015 09:49 PM
 

  With grain prices at 18th century levels who gives a rat's ass about Section 179? Why not make it $500 million?

 
 
Allan Worrell
Jacksonville, IL
12/22/2015 07:07 AM
 

  Wow, Congress and Obama finally did something. It is a Christmas miracle.

 
 
delta88
Memphis, TN
12/28/2015 10:13 AM
 

  There is a lot of good in Section 179. But a quick writeoff of all depreciation can have drawbacks as well. It reduces the total amount of expenses after the year of purchase. The farmer is still left with the debt service. And now that tractor "flipping" has abated somewhat I wonder if it will get used as much. But then again; nobody can work on anything but the dealer; might as well go ahead and get rid of it after a year or two. Unfortunately this is another example of all of business in this county being "Wall Streeted"; or forced to take a short term view of everything (in their case every 90 days). Farming was always a long term, generational investment. Not anymore.

 
 

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