The Section 179 Tax Deduction is Now $1,000,000
Under the Tax Cuts and Jobs Act, the Section 179 tax deduction has increased to $1 million. The limit on equipment purchases was also increased 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 the 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 summarizes the major changes:
|Maximum Section 179 Deduction||
|First-Year Bonus Depreciation||
|Purchases that qualify for the deduction||The addition, the following also qualifies for deduction: roofs; heating, air-conditioning, and ventilation systems; fire protection, alarm, and security systems.|
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