Companies have the chance to deduct a bigger portion of the price of sure property and gear purchases within the yr they’re positioned in service by way of bonus depreciation. For property positioned in service after September 27, 2017, and earlier than January 1, 2023, the bonus depreciation fee is 100%. Because of this 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 meant to encourage companies to put money into new gear and property, thereby stimulating financial development. The availability has been prolonged a number of instances since its unique enactment, and is at present scheduled to run out on December 31, 2022. Nevertheless, there’s a chance that the supply could possibly be prolonged once more earlier than it expires.
