To recap, when the new tax law went into effect on January 1, Section 179 entailed that users are able to deduct a certain sum of machinery (and any other tangible products) purchased that previous year and the bonus depreciation increased from $500,000 to $1 million for purchases made in 2018.
Deducting the full purchase amount of machines is a simple concept, but what about the bonus depreciation? We're not all accountants, so what does this mean, exactly?
Bonus depreciation is offered some years, and luckily for calendar year 2018, it is available at 100%. The biggest change made under the recent tax reform passed this year is that now both new and used machines purchased qualify for bonus depreciation.
It is applicable to new and used machines such as roll forming systems (pictured below), and the spending cap is $3.5 million. Qualification runs out at $3.5 Million per year in intended write-offs, meaning that all businesses that purchase, finance, and/or lease new or used business equipment during the tax year of 2018 should qualify for the Section 179 Deduction (assuming they spend less than $3,500,000).
Formtek does not provide tax, legal, or accounting advice. This material has been presented for informational purposes only, and is not intended to provide, nor should it be relied on for tax, legal, or accounting advice. For more information on Section 179, you should consult your own tax, legal, and accounting advisors.
You can also visit: www.section179.org
