IRS Raises Safe Harbor Threshold — Implication for Physical Asset Management

On November 24, 2015, IRS simplified the paperwork and recordkeeping requirements for small businesses by raising from $500 to $2,500 the safe harbor threshold for deducting certain capital items. The new $2,500 threshold takes effect starting with tax year 2016.

Most of the IT assets, such as laptops, tablet-style personal computers, and equipment and machinery parts, can now be expensed, instead of capitalized.

While this greatly simplifies the tax reporting and financial record keeping, it also creates a challenge for tracking these physical assets.

These assets have been tracked and managed in the company’s fixed asset management system. However, if they no longer are “fixed assets”,

1. Will you still track them in your company’s fixed asset management system?

2. How do you get a quick view of these assets’ location, condition, and anticipated time for replacement?

We can help you think through this new challenge. If you want to schedule some time to discuss this with our asset management experts, please don’t hesitate to email (sales@e-isg.com, or Brett.Mudrick@e-isg.com), or call us at 1-866-845-2416, ext. 1).

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