The Tax Cuts & Jobs Act enacted in 2017 launched a provision often known as “bonus depreciation” that permits companies to deduct a bigger portion of the price of sure capital belongings within the yr they’re positioned in service. In 2022, the bonus depreciation charge stands at 100%, which means companies can deduct your complete value of eligible belongings within the yr they’re acquired and put into use. This favorable tax therapy is about to run out in 2023, reverting to a 80% deduction charge in 2024 and a 0% deduction charge in 2025 and past.
The bonus depreciation provision was launched to encourage companies to spend money on capital belongings, thereby selling financial development. It has been significantly useful for companies that make important capital investments, similar to producers and development firms. The supply has additionally been credited with serving to to spice up GDP and create jobs.
