Fiscal Cliff Deal Includes Equipment Tax Breaks, Extension Of Tax Depreciation

A fall off the so-called fiscal cliff was skirted by Congress’s New Year’s passage of the American Taxpayer Relief Act, which included a number of tax breaks for small-business owners and foodservice operators. The legislation contains a long list of temporary tax provisions that will be extended for a year, including a provision allowing businesses to write off immediately half the value of new investments—including equipment—known as 50% bonus depreciation.

It also includes a one-year extension of the 15-year tax depreciation schedule for restaurant structural improvements, new construction and leasehold and retail improvements.

In the past, an individual leasing a building and spending heavily on renovations to create a restaurant would be able to deduct those costs over the next 39 years. A provision allowing restaurants to reclaim the costs over 15 years, and providing them larger deductions, expired in 2011, but now will become retroactive for ’12 and extend through ’13.