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 via bonus depreciation. For property positioned in service after September 27, 2017, and earlier than January 1, 2023, the bonus depreciation charge is 100%. Which means that companies can deduct the complete price of qualifying property within the yr it’s positioned in service, slightly 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 gear and property, thereby stimulating financial progress. The availability has been prolonged a number of occasions since its authentic enactment, and is at present 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.
