With the passage and signing into law of HR 1, The Tax Cuts and Jobs Act, the deduction limit for Section 179 increases to $1,000,000 starting in 2018 . Equipment purchasing limits have increased to $2.5 million. The bonus depreciation is 100% and is made retroactive to 9/27/2017 and good through 2022. The bonus depreciation also now includes used equipment.
Businesses can immediately expense more under the new law. A taxpayer may elect to expense the cost of any section 179 property and deduct it in the year the property is placed in service. This increased the maximum deduction from $500,000 to $1 million. It also increased the phase-out threshold from $2 million to $2.5 million.
There is also temporary 100 percent expensing for certain business assets as first-year bonus depreciation.
The new law increases the bonus depreciation percentage from 50 percent to 100 percent for qualified property acquired and placed in service after Sept. 27, 2017, and before Jan. 1, 2023. The bonus depreciation percentage for qualified property that a taxpayer acquired before Sept. 28, 2017, and placed in service before Jan. 1, 2018, remains at 50 percent.
Please contact your professional tax advisor for more information about your taxes. This is not a substitute for professional tax advice.
For more information, visit the IRS website, here, or the Official Website of Section 179, www.section179.org.
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