Want to take advantage of every tax break the law allows?
Generally, all you have to do is elect the beneficial treatment on your tax return. Easy.
But hang on a second. There’s one exception to beware of. It’s the 100% bonus depreciation deduction.
If you don’t want to deduct everything at once,
you have to be proactive and elect out!
In my new article, we show you how to plan your use of bonus depreciation the right way. We’ll also explain how to make the formal (get-me-out-of-here!) election that the IRS requires.
You’ll get all the details when you read Tax Tips: If You Don’t Want 100 Percent Depreciation, Elect Out or Else!
Three ways our fact-filled article can help you:
- We’ll tell you how to “keep on truckin’ ”. As an example of how to handle the 100% bonus depreciation correctly, we’ll explain what happens when two hypothetical buyers each purchase a truck exempt from the luxury passenger-vehicle depreciation limits. There are five options they have for deducting their vehicles as we’ll explain when you read the full article.
- We’ll warn you about how to avoid making a very costly mistake. You’ll see how one truck owner dodged a bullet and came out unscathed. And how another truck owner didn’t elect out of bonus depreciation. What happened to him? The IRS increased his depreciation on his SUV from $16,000 to $80,000 plus penalties. Ouch! We’ll tell you the whole sad story when you read the full article.
- We’ll show you the right way to opt out. In general, personal property, with a “class life” of 20 years or less is considered Section 168(k) property (bonus-depreciation property). In September of 2019, the IRS announced new final regulations under Section 168(k). We’ll tell you exactly what the IRS had to say, and provide you with a sample “elect out” form you can use with our good wishes. You can check it out when you read the full article.