New Tax Law on Expensing Equipment Purchases

The Tax Cuts and Jobs Act of 2017 made favorable revisions to the laws on expensing equipment purchases by increasing the deduction limits and expanding the types of equipment that are eligible to be expensed. Before this new law was enacted the maximum Section 179 deduction was $510,000 with a phase out of $2,030,000. Beginning in 2018 the maximum deduction is $1,000,000 with a phase out of $2,500,000. In addition, property related to lodging related businesses and certain improvements to nonresidential real property are now eligible to be expensed. Bonus depreciation has also been expanded to include 100% bonus depreciation on both new and used property where under prior law only new property was eligible for a 50% bonus depreciation.

If you would like more information on how to deduct equipment purchases for your business please feel free to contact us.