BTerrell Group Blog

Small Businesses Have Big Questions With The IRS Repair Regulations

Posted by Brian Terrell on Thu, Feb 18, 2016

The Internal Revenue Service (IRS) issued final rules for the “repair regulations” back in September Feb_Mini_Blog_2.jpgof 2013, as indicated in “To Expense Or Not To Expense,” posted by Gerald S. Silberstein on  These rules apply to the treatment of getting, repairing, or improving physical property.  An addition made in August 2014 included how to handle tangible property, which can be capitalized in most cases or expensed if items are below a certain value or have a life expectancy of 12 months or less.  The IRS released two new sets of procedures in January 2015 that are causing big stress to small businesses.  Amongst the controversy is a rule that divides businesses by those with an acceptable financial statement (AFS) and those without.  Those without an AFS can only expense for repair items that cost $500 or less, which is far below the $5,000 limit that those with an AFS can expense.  Many small businesses don’t have the resources available to secure proper AFS and the capitalizing or expensing of repair items could significantly impact finances.

While there may be changes to the repair regulations that level the playing field, small and mid-sized businesses can gain control over finances with the proper accounting and expensing solutions.  Contact BTerrell Group for information about today’s powerful technology that streamlines the accounting for fixed assets, such as Intacct with Intacct’s Fixed Assets module.

By Brian Terrell of BTerrell Group, LLP, Intacct and Sage ERP & CRM provider based in Dallas.