We Can Help You Understand The Updates for Section 179
Section 179 will be permanent at the $500,000 level. Businesses exceeding a total of $2 million of purchases in qualifying equipment will have the Section 179 deduction phase-out dollar-for-dollar and completely eliminated above $2.5 million. Additionally, the Section 179 cap will be indexed to inflation in $10,000 increments in future years.
50% Bonus Depreciation will be extended through 2019. Businesses of all sizes will be able to depreciate 50 percent of the cost of equipment acquired and put in service during 2015, 2016 and 2017. Then bonus depreciation will phase down to 40 percent in 2018 and 30 percent in 2019.
*As part of the Consolidated Appropriations Act, 2016 (H.R.2029) signed into law December 18, 2015, the Section 179 depreciation allowance was increased to up to $500,000 for equipment placed into service after Jan. 1, 2015. In addition Bonus Depreciation was brought back allowing for 50 percent bonus depreciation for equipment placed in service after Jan. 1, 2015 through Dec. 31, 2017 while going to 40% in year 2018 and 30% in 2019. For bonus depreciation, equipment must be new and put to use in the U.S. Tax savings assume a 35% tax bracket. Be sure to consult with your tax advisor for specific advice.