Companies have the chance to deduct a bigger portion of the price of sure property and tools purchases within the 12 months they’re positioned in service by means of bonus depreciation. For property positioned in service after September 27, 2017, and earlier than January 1, 2023, the bonus depreciation price is 100%. Which means that companies can deduct the total value of qualifying property within the 12 months 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 supposed to encourage companies to spend money on new tools and property, thereby stimulating financial progress. The supply has been prolonged a number of instances since its authentic enactment, and is at present scheduled to run out on December 31, 2022. Nevertheless, there’s a chance that the supply could possibly be prolonged once more earlier than it expires.
