Companies have the chance to deduct a bigger portion of the price of sure property and tools purchases within the yr they’re positioned in service via bonus depreciation. For property positioned in service after September 27, 2017, and earlier than January 1, 2023, the bonus depreciation price is 100%. Which means companies can deduct the total value of qualifying property within the yr it’s positioned in service, fairly than depreciating it over a number of years.
The bonus depreciation provision was enacted as a part of the Tax Cuts and Jobs Act of 2017. The availability was supposed to encourage companies to spend money on new tools and property, thereby stimulating financial development. The availability has been prolonged a number of occasions since its unique enactment, and is at present scheduled to run out on December 31, 2022. Nonetheless, there’s a chance that the availability might be prolonged once more earlier than it expires.
