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De minimis or 179 expensing, or bonus depreciation?

January 11, 2019

Thanks to the Tax Cuts and Jobs Act, you now have three ways to write off the entire cost of certain business assets.

Which is the best method for you to use? Let’s take a look …

Behind door #1 is bonus depreciation. You can use it to deduct 100-percent of the cost of certain business assets.

Behind door #2 is the de minimis safe harbor for certain assets costing $2,500 or less.

Behind door #3 is the tax law’s enhanced Section 179 deduction

Here’s important information
you need before you make your choice.

Fact #1: For federal income tax purposes, you’re better off using the new 100-percent bonus depreciation for your small asset purchases instead of the de minimis safe harbor election or Section 179 expensing. You’ll get all the details when you read the full article.

Fact #2: There are good reasons for not using the de minimis safe harbor election. In fact, there are three reasons for quickly sailing out of the “safe” harbor. We’ll explain them in detail when you read the full “because of tax reform” article.

Fact #3: There’s a big problem with 179 expensing. Section 179 expensing has one deficiency compared with bonus depreciation and de minimis expensing. It’s called “recapture.” All will be explained when you read the full article.

Filed Under: Depreciation, Records, Section 179, Tax Planning

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