We had a reader ask the following:
"I haven't been able to see if there is any development in increasing the limit for Sec 179 lately for 2014. I am holding out on any equipment purchases until I see an increase in the limit. I would appreciate it if you keep us informed on any changes or lack of changes."
I know that many farmers have the same questions as this reader. Here are my official updated odds on when we might know what the actual 2014 Section 179 amounts will be:
By Memorial Day 10 Billion to 1
By Labor Day 10 Million to 1
By the November Mid-Term elections 500 to 1
Between the November Mid-Term Elections and December 15, 2014 25 to 1
After December 15, 2014 and before January 1, 2015 1 to 1
After December 31, 2014 5 to 1
Now, these are not actual odds, but this does lay out our timing on the actual 2014 Section 179 amount . We must remember that the 2012 amount was in the $130,000 range for almost all of 2012. It was not until after the elections when they updated it to $500,000. That bill was passed by the House and Senate on about the last day of the year and signed by President Obama after year-end.
Since there is a mid-term election this year and any change to Section 179 will most likely be in conjunction with other major tax law changes that almost always happen after the elections, we are fairly confident that farmers will only have a few days of knowing the actual amount before year-end. This does not leave much time for actual planning.
For planning purposes, the current law is $25,000 and we think it should exceed $100,000, but who knows if it will, when it will, and the actual amount. If you need to purchase farm equipment, I would go ahead and make the purchase. If the Section 179 incentive is needed to finalize the purchase and you do not need the equipment now, I would hold off.
Our Crystal Ball is very cloudy, but I am almost completely certain that the actual Section 179 expense deduction limits will not be known for several months (and remember, they may keep it at $25,000). As usual, we will keep you posted.