- In 2025, businesses can benefit from Section 179 and Bonus Depreciation by fully deducting the cost of qualifying equipment placed in service. Here are the key points:
Section 179: Allows businesses to deduct the full purchase price of qualifying equipment financed or purchased during the tax year, up to a limit of $1,220,000 for 2025. This applies to both new and used equipment.
Bonus Depreciation: Provides a 60% bonus depreciation for 2025, applicable to both new and used equipment. This can be combined with Section 179 for maximum tax savings.
Eligible Equipment: Includes new and used business assets with a recovery period of 20 years or less, such as equipment, machinery, computers, and certain vehicles.
Planning Tips: Businesses should plan for major purchases and confirm acquisition dates and in-service dates with their CPA to determine eligibility for 100% or 40% in 2025
These provisions are designed to encourage capital investment and improve cash flow for businesses, especially those in the manufacturing sector. It is advisable for businesses to consult with tax professionals to understand the full implications and to plan accordingly for the tax year 2025.