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 by 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 complete value of qualifying property within the yr it’s positioned in service, relatively 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 supply was meant to encourage companies to spend money on new tools and property, thereby stimulating financial development. The supply has been prolonged a number of instances since its authentic enactment, and is presently scheduled to run out on December 31, 2022. Nevertheless, there’s a risk that the availability could possibly be prolonged once more earlier than it expires.
