With the increased Section 179 limits and the broadening of what qualifies for the deduction, taxpayers should see a favorable change in their tax liabilities as a result of the Tax Cuts and Jobs Act.
Intended to provide additional benefits to small business taxpayers, Section 179 allows a taxpayer to immediately expense the cost of qualifying property—rather than recovering such costs through depreciation deductions. Like the new bonus deprecation provision, this expense allowance applies to both new and used property.
Here’s a glimpse into the limitation changes as a result of the Tax Cuts and Jobs Act in a side-by-side comparison:
Furthermore, Section 179 now applies to more than qualified leasehold improvements, restaurant properties and retail improvement properties, it applies to improvement properties such as roofs, heating, ventilation, air conditioning, alarms and security systems. Read more on qualified improvement properties in our recent article, Understanding Changes to Property Depreciation Under New Tax Laws.
Doeren Mayhew’s tax advisors encourage businesses to consider the following when applying this deduction:
To find out how this tax incentive can be applied appropriately for your business, please contact Doeren Mayhew’s tax advisors today.
Want to reach the author? Email Kyle Lusczakoski or contact him at 248.244.3048.
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