Bonus depreciation is a tax incentive that allows businesses to depreciate a higher percentage of the cost of certain qualifying property in the year the property is placed in service. The current bonus depreciation rate is 100% for property acquired and placed in service after September 27, 2017, and before January 1, 2023. Bonus depreciation can be taken on new or used qualifying property, including equipment, vehicles, and certain real property improvements. Businesses can also take bonus depreciation on Qualified Improvement Property (QIP) if it is placed in service after December 31, 2017 and before January 1, 2023.
- Businesses should consider the timing of when to acquire and place in service qualifying property to maximize the benefit of bonus depreciation.
- It’s important to keep accurate records and documentation of the cost of the qualifying property and the date it was placed in service to claim bonus depreciation.
- Businesses should also consult with a tax professional to ensure that they are in compliance with all the rules and regulations related to bonus depreciation.
It’s important to consider timing of the purchase, keep accurate records, and consult with a tax professional to ensure compliance with rules and regulations and maximize the benefits of bonus depreciation.
- Businesses should consider taking advantage of bonus depreciation to reduce their taxable income in the year the qualifying property is placed in service.
- Businesses should plan and strategize their purchases of qualifying property to maximize the benefits of bonus depreciation.
- It’s recommended to consult with a tax professional to ensure that bonus depreciation is being claimed correctly and in compliance with all rules and regulations.