Section 179 Expensing is $1,050,000 and 1st Year Bonus Depreciation is 100%.
Section 179 Deduction: Section 179 of the tax code allows Small Businesses (those whose equipment purchases of all kinds, new or used, do not exceed $2,620,000) to expense the first $1,050,000 of qualifying equipment. Any amount over $2,620,000 will decrease the $1,050,000 amount dollar for dollar.
100 % Bonus Depreciation is still available for 2022. Any size business will be able to depreciate 100% of the Adjusted Cost Basis of new and used equipment during this period. 100% Bonus Depreciation starts to phase out in 2023 as follows: 80% for property placed in service after 12/31/2022 and before 1/1/2024; 60% for property placed in service after 12/31/2023 and before 1/1/2025; 40% for property placed in service after 12/31/2024 and before 1/1/2026; 20% for property placed in service after 12/31/2025 and before 1/1/2027.
Section 179 is a tax code created to help businesses – By allowing businesses to deduct the full amount of the purchase price of equipment (up to certain limits), Section 179 is a fantastic incentive for businesses to purchase or lease equipment this year.
The various Stimulus Acts over the past few years have included special provisions for Section 179 and Bonus Depreciation, and greatly increased the limits on how much businesses can deduct. There is simply no better time than now to take advantage of Section 179 and Bonus Depreciation!
For more information, please visit the Section 179 website.
DISCLAIMER: MAAC Machinery is not licensed to provide accounting or legal advice. Please consult your own CPA or Counsel for any accounting or legal advice and as to how this new bill can help your company.