Frequently Asked Questions
What is Section 179?
With Section 179, you can deduct up to $1,220,000 of qualifying equipment in the year you acquire and put it into service. Bonus depreciation can then be used to deduct any remaining amount over the Section 179 limit. Recently, bonus depreciation began to phase out, decreasing from 100% in 2022 to 80% in 2023. In 2024, the rate dropped to 60%. One thing to remember about the Section 179 deduction is that the amount you can deduct can’t exceed your profit for the year. However, bonus depreciation can then be used to deduct any remaining amount.
What is bonus depreciation?
How is 100% bonus depreciation being phased out?
What equipment qualifies for Section 179 and bonus depreciation?
What is Section 179?
What is bonus depreciation?
How is 100% bonus depreciation being phased out?
What equipment qualifies for Section 179 and bonus depreciation?
Basically, bonus depreciation is a way to accelerate the equipment depreciation you’d normally spread over a period of years. Instead of depreciating a percentage of the asset each year, the bonus depreciation benefit allows you to depreciate 60% of the asset value remaining after Section 179 deductions.
What is Section 179?
What is bonus depreciation?
How is 100% bonus depreciation being phased out?
What equipment qualifies for Section 179 and bonus depreciation?
Recently, bonus depreciation began to phase out, decreasing from 100% in 2022 to 80% in 2023. In 2024, the rate dropped to 60%, and in 2025, bonus depreciation is scheduled to return to 40%. To take full advantage of bonus depreciation, businesses must acquire qualifying equipment and put it into service by December 31 .
What is Section 179?
What is bonus depreciation?
How is 100% bonus depreciation being phased out?
What equipment qualifies for Section 179 and bonus depreciation?
The IRS allows nearly all equipment types – new or used – to qualify for the Section 179 deduction. This includes tangible and intangible assets, whether purchased outright, financed, or leased, as long as they fall below the phaseout threshold amount and are placed into service (or ready to be put into service) in the year they are acquired.
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To help you decide if taking advantage of Section 179 and bonus depreciation can help you get equipped more affordably, we’ve put together this quick FAQ guide. As with all matters related to the federal tax code, be sure to consult your tax advisor for the latest details on how bonus depreciation and other tax benefits apply to your business.
