Purchase new or used equipment and place it into service by 12/31/17*
- Taxpayers can expense up to $500,000 in purchases for 2017, as long as total purchases don’t exceed $2 million and certain taxable income limitations are met. New and used equipment is eligible for expensing.
- Bonus Depreciation for new equipment purchases this year, allowing 50% bonus depreciation in addition to normal depreciation. Equipment must be purchased and placed in-service during 2017 to qualify.
- Apply the additional standard depreciation of 20% per year for another five years.
2017 Section 179 and bonus depreciation example calculation
| Total 2017 equipment investment | $750,000 |
| Section 179 deduction limit | $500,000 |
| Additional 50% bonus depreciation | $125,000 |
| 20% MACRS depreciation (assuming a 5-year life and $250,000 remaining basis) | $25,000 |
| Total 2017 tax deduction: $500,000 + $25,000 + $125,000 | $650,000 |
| Potential tax savings in first year (assuming a 35% tax rate) | $227,500 |
*Consult your tax advisor for more details.
