Bonus depreciation became a tax thing in 2002, starting with 30 percent depreciation on certain new property.
From January 1, 2015, through September 27, 2017, lawmakers set a 50 percent rate on certain new property.
And then, the big “hip, hip, hooray!” Starting after September 27, 2017, you could claim 100 percent bonus depreciation on (wait for this) both new and used property.
But now, sadly, get ready to say goodbye to the “hip, hip, hooray!”
Starting in 2023 (which is right around the corner), lawmakers scheduled bonus depreciation to decline 20 percent each year, as follows:
Year Property Placed in Service | Bonus % |
1/1/2015 through 9/27/2017 (new property only) | 50% |
9/28/2017 through 2022 | 100% |
2023 | 80% |
2024 | 60% |
2025 | 40% |
2026 | 20% |
2027 and later | 0% |
Example. If you purchase $100,000 of qualifying equipment for your business and place it in service in 2022, you may deduct $100,000 in 2022 using 100 percent bonus depreciation. If you wait until 2023, bonus depreciation delivers an 80 percent deduction.
Does this mean you should rush out and purchase business property before 2022 ends, to take advantage of the 100 percent bonus? Not necessarily. You likely have an alternative that is not ... Log in to view full article.
