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Deadline Approaches for Section 179 & Bonus Depreciation Opportunities on 2023 Equipment Buys

The year-end offers a window of opportunity for significant tax breaks on construction equipment purchases or leases. The Section 179 tax deduction, a permanent part of the tax code since 2017, allows businesses to deduct the entire cost of new or used construction equipment acquired by December 31 from their 2023 gross income. The deduction has reached its highest level ever, with a maximum expense deduction of $1,160,000 and a phaseout threshold of $2,890,000. Additionally, 100% bonus depreciation, a benefit since 2017, starts phasing out in 2023, decreasing to 80% of the purchase price, with a further 20% decline annually until its expiration on January 1, 2027.

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