Toward the end of the year, Section 179 of the American tax code becomes a huge topic among business owners. There are some fresh changes to be aware of in 2023 that will affect bonus depreciation over the next few years. This article will cover the latest changes to Section 179 and how the Equipter 4000 is, perennially, a great idea for your equipment purchase planning.
In the United States, Section 179 is a part of the tax code that allows businesses to deduct the purchase price of qualifying pieces of equipment during a tax year, encouraging businesses to invest in themselves with tax incentives and grow their business. In 2023, the total equipment purchase limit was raised to $2.89M, up from $2.7M in 2022.
However, bonus depreciation, which generally kicks in after the Section 179 cap has been met for businesses, will phase down beginning in 2023. In 2023, only 80% of the cost of a new piece of equipment can be immediately depreciated with the rest being depreciated over the next seven years. In 2024, this bonus depreciation level will drop to 60% and it will fall by twenty percentage points until 2027 where bonus depreciation will go away entirely. What this means for businesses is that their money will go much further this year compared to the immediate bonus depreciation value in the coming years.
Equipter recently sat down with Kyle Beltle, CPA from Kauffman CPA Company to talk through how Section 179 and bonus depreciation can benefit your business. You can click here to go to the video or view it below.