These changes in how businesses depreciate the cost of equipment will benefit most businesses & could accelerate your purchasing decisions.

What you need to know about the new regulations on deducting the cost of equipment:

First, there are two tools that can be used – Bonus Depreciation and Section 179.

Section 179 Deduction - The new law increases the amount of business property purchases (new or used equipment) that you can expense each year under Section 179 to $1 million (from $500,000 previously). Normally, the cost of equipment is capitalized and depreciated so that the tax benefit is spread out slowly over several years. Section 179 allows you to get the tax break immediately in the year the property is placed into service after 2018.

Bonus Depreciation - Under previous tax rules, the bonus depreciation deduction was limited to 50% of eligible new property. The Tax Reform extends and modifies bonus depreciation to allow businesses to immediately deduct 100% of eligible property placed in-service after September 27, 2017. Eligible property includes New & Used Equipment.

As you can see from the above, there can be significant tax benefits to purchasing equipment in 2018 & using the Bonus Depreciation tool. It might be worth accelerating some equipment purchases. 

Please consult with your tax accountant as there are several factors (like State Taxes) that may need to be considered before making a decision.