Thinking about pushing your buying decisions into 2021? Consider the benefits of receiving this year’s bonus tax depreciation if you purchase a truck before year-end.
The Tax Cuts and Jobs Act, signed on December 22, 2017, greatly enhanced bonus depreciation opportunities available to businesses in the market to buy equipment. In 2020, taxpayers can elect a 100 percent bonus depreciation deduction under either IRC Section 179 or 168(k).
Typically, when your business purchases equipment items, it can write those items off a little at a time through regular depreciation. However, bonus depreciation enables you to recognize a full deduction for tax purposes in the year of purchase. There were two enhancements under 168(k) that were not previously available or within Section 179, which are:
- There is no dollar limit on the amount of property you can purchase that can qualify for the bonus depreciation.
- This deduction applies to both new and used equipment.
To learn more information about the laws, visit: https://www.irs.gov/newsroom/additional-first-year-depreciation-deduction-bonus-faq
This summary was written to support the promotion or marketing of the matter addressed above, and is not tax advice provided by Murphy-Hoffman Company or MHC Kenworth. The taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.