The Tax Cuts and Jobs Act of 2017 includes several important business-related tax incentives for you to invest in equipment in 2017:
Section 179 Expense Election for 2017The Section 179 Deduction Limit is $510,000.
Under the Internal Revenue Code Section 179, up to $510,000 can be deducted from your taxable income, if you acquire and place into service qualifying new and used equipment during 2018. The deduction is reduced "dollar-for-dollar" to the extent that capital purchases of qualifying new and used equipment exceed $2,030,000, until it is completely phased out if total purchases equal or exceed $2,540,000. This "one-time" deduction can be applied to one, several or the total of all qualifying asset purchases.
50% Bonus 1st Year Depreciation in 2017
The law includes a 50% bonus depreciation expense allowance that applies to qualifying new and used equipment purchased and placed into service in 2017. This will allow you to claim an additional first-year depreciation bonus equal to 50% of the adjusted basis of "qualified property." The adjusted basis is the Equipment Cost less Section 179 Depreciation, if applicable. If Section 179 is not applicable, then Equipment Cost is the basis.
Normal 1st Year Depreciation
For most agricultural and construction equipment, 20.00% of your Remaining Cost may be deducted the first year the equipment is placed into service. Remaining Cost is defined as Equipment Cost less the Section 179 Depreciation, if applicable, and 50% Bonus Deprecation, if applicable. If Section 179 depreciation is not applicable, then your Remaining Cost will be the Equipment Cost less 50% Bonus Depreciation.
Calculate Your Potential Depreciation Deduction
Input Total Amount of Purchases you have made or plan to make in 2017
20.00% for Agriculture or Construction