Deduction limits on depreciable assets and transit costs moved up a little bit as the IRS released new inflation adjustments made in response to December's tax extender legislation, according to the Journal of Accountancy. Specifically, the $2 million phaseout limit for Sec. 179 deductions is now $2.01 million, and the $200 limit for commuter expense deductions is now $205. While the education cost deduction was also adjusted for inflation, the IRS felt the sum was too low to result in a limit increase. 

 

The tax extender legislation has come as a welcome change for preparers, who can move with more certainty, now that they know which provisional tax breaks are permanent, according to Accounting Today, with the automatic inflation adjustments providing an extra degree of predictability on top of that. And even though certain tax breaks, such as bonus depreciation, were merely extended, the fact that they can be relied upon for the next few years is still an improvement over not knowing whether they would be there at all. 

 

Uncertainty still remains on the state and local level, however: vital forms for corporate tax filings are still unavailable, even as the deadline draws nearer for both New York City and New York state. Preparers have been advised to seek extensions due to this delay.