IRS Section 179 Deduction

What is the IRS Section 179 Deduction?

The IRS Section 179 Deduction allows you to take the depreciation deduction for qualifying business assets in their first year, rather than factoring in depreciation over a longer period of time.

IRS Section 179 Deductions Highlights:
    • Most new and used equipment, as well as some software, qualify for the Section 179 Deduction
    • 100% bonus depreciation for 2021 new and used equipment allowed*
    • Section 179 deduction limit is now $1,050,000**
    • 2021 Section 179 Deduction threshold for total amount of equipment that can be purchased is now $2,600,000

*Under Modified Accelerated Cost Recovery System (MACRS) Bonus Depreciation has increased first-year depreciation deduction to 100% (vs. 50%) of the adjusted gross basis of qualified property. This goes into effect for assets placed in service after January 1, 2021 and before December 31, 2021. You can use bonus depreciation for purchases of new or used property. Under prior law, you could only use bonus depreciation for new property.

**Credit and equipment restrictions apply. This program does not assume your company will qualify to take advantage of the IRS Section #179 depreciation schedule which allows rapid first year depreciation of certain assets acquired. The amount of previous depreciation your company may have used may affect your ability to utilize the elections. Please consult your tax advisor or accountant for additional information. Equipment must be purchased and placed in service by 1/1/2022.

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