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May 24, 2018The Tax Cuts and Jobs Act Brings Changes for Business Depreciation
The IRS reminds business owners that the passage of the Tax Cuts and Jobs Act may affect business depreciation deductions and taxes.
Generally, we business taxpayers can depreciate the tangible property except for land, including buildings, machinery, vehicles, furniture, and equipment.
Changes to depreciation and how they will affect businesses may include:
- Businesses can immediately expense more under the new law; taxpayers may elect to expense the cost of any property and deduct it in the year the property is placed in service.
- Maximum deduction increased from $500,000 to $1 million.
- The phase-out threshold increased from $2 million to $2.5 million.
- The new law allows taxpayers to elect to include improvements made to a nonresidential property. The improvements must have been made after the date the property was first placed in service.
These improvements include:
- Any improvement to a building’s interior
- Roofs
- Heating and air conditioning systems
- Fire protection systems
- Alarm and security systems
Improvements that do not qualify:
- Enlargement of the building
- Service to elevators or escalators
- The internal structural framework of the building
These changes apply to property placed in service in taxable years beginning after December 31, 2017.
Courtesy of https://go.usa.gov/xQ8ux.
For exact details about how these depreciations apply to your business, please talk to your tax specialist. And to receive more tax tips and other financial information, subscribe to our emailed newsletter:
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