Business taxpayers must use depreciation to deduct the cost of property purchased for use by the company. Basically, depreciation spreads the cost across the useful life of the property. Two options can allow you to take the expense earlier or faster. One is the §179 depreciation; the other is bonus depreciation. Section 179 depreciation allows a taxpayer to deduct up to $1,000,000 of the cost in the first year for many kinds of property.
Bonus depreciation allows businesses to deduct a large percentage of the cost of eligible purchases the year they acquire them, rather than depreciating them over a period of years.
It used to be that you could only take bonus depreciation for new property, but the Tax Cuts and Jobs Act expanded that option to used property. See us to determine the best way to expense business property.
