OBL Blog Image Section179 Update
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In 2018, the deduction limit for Section 179 increases from $500,000 to $1,000,000 for 2018 and beyond. The limit on equipment purchases has increased, from $2 million to $2.5 million. The deduction now includes any of the following improvements to existing commercial property; roofs, heating, air-conditioning and ventilation systems, fire protection, alarm, and security systems.  Also, the bonus depreciation increases from 50% to 100%. Bonus depreciation allows a business owner to deduct a new long-term asset’s cost in the first year, instead of depreciating the cost over many years.

The 100% bonus depreciation amount remains in effect until January 1, 2023. In later years, the first-year bonus depreciation deduction amount goes down, as follows:

  • 80% for property placed in service after December 31, 2022 and before January 1, 2024.
  • 60% for property placed in service after December 31, 2023 and before January 1, 2025.
  • 40% for property placed in service after December 31, 2024 and before January1, 2026.
  • 20% for property placed in service after December 31, 2025 and before January 1, 2027.

OBL advises to contact your Tax Accountant or Certified Public Accountant for further clarification.