IRS Tax Code Section 179 – Equipment & Technology Credit

IRS Tax Code Section 179 DeductionThe Section 179 Tax Deduction is Now $1,000,000

With the Tax Cuts and Jobs Act that was passed in late December 2017, the Section 179 deduction limit was increased to $1 million. The limit on equipment purchases was also increased from $2 million to $2.5 million.

In addition to the limit change, you can now deduct not only equipment, technology, and off-the-shelf software, but also many improvements to non-residential property including roofs; heating, air-conditioning, and ventilation systems; and fire protection, alarm and security systems. (Note: The improvements must be purchased and placed into service after the date the property was first placed in service).

In addition, the first year bonus depreciation has increased from 50% to 100% on qualifying long-term assets placed into service after September 27, 2017. This bonus depreciation is applicable to both new and used property. The bonus depreciation amount is scheduled to remain in effect until January 1, 2023.

This chart summarize the major changes:

2018

Maximum Section 179 Deduction

$1,000,000

First-Year Bonus Depreciation
  • New and used property.
  • Deduct 100% of purchase cost after Section 179 deduction
  • Up to $2,500,000
  • In effect until January 1, 2023
Purchases that qualify for deduction The addition of the following also qualify for deduction: roofs; heating, air-conditioning, and ventilation systems; fire protection, alarm, and security systems.

For more information contact HSFS via phone 800-853-9493 or email hsfs@henryschein.com.

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