Changes to the Depreciation Bonus Small Business Owners Need to Know

This year’s tax changes to the depreciation bonus could positively affect your business—especially when it comes to writing off assets. As a business owner, as in the past, you’ll be able to write off most depreciable business assets in the year you placed them in service. This year the depreciation deduction for depreciable business assets with a depreciation period of 20 years or less, is much more generous than in years past. Here is an overview of the new rules that you’ll want to keep in mind.

Not only did it jump from 50% to 100%, but you can now include both new and used assets. In the past only new assets were applicable.

If choosing to utilize this deduction, you also need to have acquired the property and place it in service by September 27th, 2017. The assets that will most likely qualify for this bonus depreciation are computers, equipment, machinery, appliances, and furniture generally qualify.

Another one of the changes to the depreciation bonus to keep in mind is the utilization of this deduction for new or used vehicles. However, one caveat to keep in mind is the vehicle must be in service for your small business more than 50% of the time, and again placed in service by September 27th, 2018. The allowance will prove to be a major benefit to small business owners shopping for new vehicles.

Be sure to read more about the issued proposed regulations and the instructions for Form 4562, Depreciation and Amortization to ensure that the property in question qualifies.