Tax Credit 179

What is Tax Credit 179?

Section 179 has been enhanced for 2017 tax year. This is due to the passage of H.R.8: American Taxpayer Relief Act of 2012 (The “fiscal cliff / fiscal crisis” bill).

2018 Deduction Limit =$1,000,000

2018 Spending Cap on Equipment Purchases =$2,500,000

2018 Bonus Depreciation = 100%

2018 Section 179 Example:

Equipment Purchase: $1,150,000

First Year Write Off: $100,000,000

100% Bonus First Year Depreciation: $150,000

Normal First Year Depreciation: (20% in each of 5 years on remaining amount) $0

Total First Year Deduction: $1,150,000

Cash Savings: $402,500

Equipment cost after Tax: $747,500 (assuming a 35% tax bracket)