- Share
Purchase Equipment in 2023 Using Your Section 179 Tax Benefit
SECTION 179 ALLOWANCE:
BONUS DEPRECIATION:
The applicable bonus depreciation percentage will now be 80% for property placed in service during 2023. Bonus depreciation applies to new and used equipment.
Example of an Equipment Purchase of $25,000
*Please consult your own tax advisor regarding the application of the tax laws to your specific situation.
- Any new or used equipment purchased in 2023 can be deducted in full (up to a total of $1,160,000) in year 1 if the total amount of applicable assets purchased does not exceed $2,890,000.
- Once the $2,890,000 (cost) threshold is surpassed, the Section 179 allowable deduction ($1,160,000) will begin to be phased out and will be totally phased out at $4,050,000 (cost) of current year additions.
- The increased allowance applies to units contracted for and put into service through December 31, 2023. The balance of equipment investment above $2,890,000 is eligible for Standard MACRS depreciation.
BONUS DEPRECIATION:
The applicable bonus depreciation percentage will now be 80% for property placed in service during 2023. Bonus depreciation applies to new and used equipment.
Example of an Equipment Purchase of $25,000
| Purchase Price | $25,000 |
| 1st year Section 179 allowance | $1,160,000 |
| Total 1st year deduction | $25,000 |
| Potential 1st year tax savings (21% tax bracket) |
$5,250 |
| After tax cost of equipment | $19,750 |
*Please consult your own tax advisor regarding the application of the tax laws to your specific situation.