Woo hoo! The IRS listened to tax pros!
After overwhelming response from the public, the IRS is increasing the safe harbor limit for expensing certain items. The limit is increasing from $500 to $2,500, starting in tax year 2016. (Notice 2015-82). It's not retroactive, though, so the limit has increased going forward.
As for expensing large items (like a $2,400 mower for a landscaping client, for example), it's my opinion, that it's still better for the client, in terms of lowering audit risk, to Section 179 this type of purchase and put it on the depreciation line rather than the "supplies" line, other "other expense".
Also, it's also a more correct tax treatment to depreciate an asset, and I don't see the benefit of expensing this type of equipment unless there's a going concern issue and you have the possibility of Section 179 recapture in the near future.
With smaller business clients (such as small Schedule C taxpayers), it depends on the type of asset, but I don't think it's a lot of extra work to depreciate a $500 computer or something similar. The asset does have a useful life exceeding one year, after all. If it's something small like a cheap $150 printer, then I usually expense it.
As tax professionals, we have to use our own reasonable judgement, and that varies based on the size of the business. Obviously a $500 purchase is going to be material for a business that only has $5.000 in gross revenues, but it probably not be material for a business that grosses $500,000. Materiality is always a factor and we should take that into account first.
That being said, I'm very pleased that the IRS decided to increase this safe harbor threshold.