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With Section 179, you can deduct up to $1,080,000 of qualifying equipment in the year you acquire and put it into service. Bonus depreciation can then be used to deduct any remaining amount over the Section 179 limit.
Beginning next year, enhanced bonus depreciation begins to phase out, decreasing from 100% in 2022 to 80% in 2023. Then in 2024, the rate drops to 60%. In 2025, bonus depreciation is scheduled to return to 40%. To take full advantage of enhanced bonus depreciation, businesses will need to acquire qualifying equipment and put it into service by December 31st.
You can use our Section 179 Savings Calculator to see firsthand how taking advantage of Section 179 can help you manage your taxes. For more information, see additional Section 179 resources and FAQs below.
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To help you decide if bonus depreciation can help you get equipped more affordably, we’ve put together a quick FAQ. As always, please consult your tax advisor for the latest details on how bonus depreciation and other tax benefits apply to your business.
With Section 179, you can deduct up to $1,080,000 of qualifying equipment in the year you acquire and put it into service. Bonus depreciation can then be used to deduct any remaining amount over the Section 179 limit. In past years, bonus depreciation was capped at 50% of the asset purchase price, though the percentage was increased to 100% through 2022 by the Tax Cuts and Jobs Act of 2017. One thing to remember about the Section 179 deduction is that the amount you can deduct can’t exceed your profit for the year. However, bonus depreciation can then be used to deduct any remaining amount.
Basically, bonus depreciation is a way to accelerate the equipment depreciation you’d normally spread over a period of years. Instead of depreciating a percentage of the asset each year, the enhanced bonus depreciation benefit allows you to depreciate 100% of asset value remaining after Section 179 deductions.
Beginning next year, enhanced bonus depreciation begins to phase out, decreasing from 100% in 2022 to 80% in 2023. Then in 2024, the rate drops to 60% and in 2025, bonus depreciation is scheduled to return to 40% beginning in 2025. To take full advantage of enhanced bonus depreciation, businesses will need to acquire qualifying equipment and put it into service by December 31 .
Beginning next year, enhanced bonus depreciation begins to phase out, decreasing from 100% in 2022 to 80% in 2023. Then in 2024, the rate drops to 60% and in 2025, bonus depreciation is scheduled to return to 40% beginning in 2025. To take full advantage of enhanced bonus depreciation, businesses will need to acquire qualifying equipment and put it into service by December 31st.
Contact us today to learn more about Section 179 and how LEAF can build you a custom payment plan that is right for your business at 800.819.5556.
Terms and Conditions: All applications are subject to credit approval. LEAF finances equipment only for business purposes and not for personal, family, or household use. The above is for informational purposes only and is not intended as tax or legal advice. Always check with your accountant or tax advisor to verify your eligibility for any tax deduction.
