Combine Section 179 and Bonus Depreciation to maximize tax savings on new equipment acquired in 2018.
Section 179 Allowance:
The Tax Cuts and Jobs Act (H.R.1) makes the Section 179 expensing allowance permanent and is now set at the $1,000,000 level in 2018 for qualifying new and used equipment. Businesses with over $2,500,000 of purchases in 2018 will have the expense deduction phase out dollar for dollar up to $3,500,000. In addition, the Section 179 amounts are indexed to inflation in $10,000 increments for future years.
The Tax Cuts and Jobs Act (H.R.1) extends and modifies the rules pertaining to bonus depreciation. The applicable bonus depreciation percentage will now be 100% for property placed in service during 2018.
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