It is a standard part of the IRS tax code that enables companies to deduct the full cost of property or business equipment without paying the full price at the time of purchase.
You can finance or lease qualifying equipment or property, start using it, and then on your taxes, you can write off the full price of the qualifying equipment or property.
However, it must be purchased and used during the tax year being claimed.
So, instead of writing off the depreciation of a purchase or lease over several years, companies can do it during the year it was purchased and used.
So, you can make the purchase or lease NOW instead of waiting, and you will get significant tax savings from the deduction.
QUICK IMPORTANT FACTS FOR 2022
- Equipment must be purchased, financed, or leased and used between January 1, 2022, and December 31, 2022.
- The 2022 Deduction Limit is $1,080,000
- The 2022 Spending Cap on equipment purchases is $2,700,000
- Bonus Depreciation is 100% for 2022
Again, these will change annually and can even change mid-year. Do your due diligence by contacting an accountant or tax professional.
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