Year-End Equipment Purchases? Take Advantage of Tax Deductions

Time is running out for equipment buyers to take advantage of claiming Section 179 tax deductions of $500,000 and 50 percent bonus depreciation.

📅   Wed November 29, 2017 - National Edition
Emily Buenzle


The Tax Increase Prevention Act of 2014, which was signed into law in December of that year, allows those buying certain types of qualifying equipment to write off more of the cost of the piece immediately via bonus depreciation, and/or through Section 179 expensing, according to financial tech company, Accruit.
The Tax Increase Prevention Act of 2014, which was signed into law in December of that year, allows those buying certain types of qualifying equipment to write off more of the cost of the piece immediately via bonus depreciation, and/or through Section 179 expensing, according to financial tech company, Accruit.

Time is running out for equipment buyers to take advantage of claiming Section 179 tax deductions of $500,000 and 50 percent bonus depreciation.

The Tax Increase Prevention Act of 2014, which was signed into law in December of that year, allows those buying certain types of qualifying equipment to write off more of the cost of the piece immediately via bonus depreciation, and/or through Section 179 expensing, according to financial tech company, Accruit.

Some additional specifications about the program:

  • The 50 percent bonus depreciation is only in effect until the end of 2017. In 2018, it will drop to 40 percent, and then to 30 percent in 2019.
  • Construction, mining, forestry and agricultural equipment with a MACRS recovery period of 20 years or less is eligible.
  • The bonus depreciation applies only to purchases of new equipment.
  • Eligible equipment must be bought and used in the same year that the taxpayer is claiming the bonus.
  • Rather than claiming the bonus depreciation, companies have the option to accelerate alternate minimum tax credits.
  • The taxpayer is not required to claim the depreciation bonus.
  • Section 179 expensing levels start at $500,000, with a $2 million cap.
  • Expensing applies to both new and used equipment.
  • Expensing can be combined with bonus depreciation.