Tax Reform: Section 179 expensing changes

The Tax Cuts and Jobs Act (TCJA) has brought on major tax law change that impacts small businesses. The TCJA enhanced some tax breaks, repealed others and modified several deductions that are likely to affect a majority of business owners. Here’s more details on the Section 179 expensing changes.

Tax Reform: Section 179 expensing changes

The TCJA raises deduction limits to enable expensing of up to $1 million of business property purchases. And the phaseout threshold increases to $2.5 million. Property can now be new or used equipment, as long as it’s placed in service for the first time for your business. In addition, Section 179 may now be used on expenses related to improvements to nonresidential real estate. This includes roofs, heating and ventilation, air-conditioning, fire protection, and alarm and security systems.

Start using the purchased property in 2018 to qualify for the deduction this year, as qualified assets must be placed in service. And remember, the maximum is still limited to your taxable business income for the year.

If you have any questions, visit with one of our Tax experts.


Published: 9-13-18