There are a number of very attractive tax benefits that are currently available that can be utilized to supplement your facilities growth.
Under the IRS Section 179, a taxpayer may expense up to $1,220,000 of qualified equipment placed in service in 2024 (amounts will be indexed for inflation in future years). The rules are designed for small companies, so the $1,220,000 deduction phases out when a business purchases more than $3,050,000 in one year. (Companies cannot write off more than their taxable income).
The Tax Cuts and Jobs Act enacted in 2018 increased the first-year bonus depreciation to 100% for qualified investments made after Sept. 27 2017 and before Jan 1, 2023. Bonus depreciation is available for all businesses, is not capped at a certain dollar level and is good for new or used property.
Maximize the tax benefit with a finance agreement (conditional sales contract) or capital lease. Both allow a business to acquire equipment with a low monthly payment while taking advantage of the Section 179 Expensing allowance and Bonus Depreciation.
Reminder: to take advantage of the 2024 tax incentives, your business equipment must be put in use by year-end. It is important for each company to contact their accountant or tax advisor to learn about the specific impact to your business and realize your true tax savings.
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