Technically the IRS requires businesses to capitalize (depreciate) all assets that have a life of longer than a year. Which might not sound that bad, but it would create a lot of headaches for smaller businesses trying to keep track of everything. Imagine maintaining a depreciation schedule with staplers, chairs, etc.
Luckily the IRS recently formalized an exception to that rule. If a simple election is attached to the tax return, it allows a business to automatically expense items up to $500 in value, which is a pretty common rule of thumb anyway (e.g., a computer monitor for $200 would probably get recorded as Office Expense, and a $700 computer would get recorded as a Fixed Asset and depreciated).
Note that in order to make use of the election, each business should have a written policy in place to that effect.
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