The Tax Cuts and Jobs Act of 2017 provides businesses with additional tax benefits for 2023 and beyond.
What does this mean for businesses?
The maximum Section 179 deduction for the 2023 tax year is $1,160,000. That deduction phases out for companies that spend over $2,890,000 on equipment per year. These numbers are adjusted each year for inflation. Equipment acquisitions beyond this limit are still depreciable using bonus depreciation.
Capital leases are considered to be ordinary equipment acquisitions for tax purposes, so they’re eligible for Section 179 and bonus depreciation.
Yes, as long as it enters service in the year in which the depreciation is taken. This applies to both new and used equipment.
Yes. Even with 80% bonus depreciation, you still can’t write off more than your taxable income.