Depreciation Update: Section 179 & Bonus Depreciation

Similar to 2014, the United States government procrastinated in determining the fate of increased deduction limits for business property placed in service during the year.

Depreciation UPdate

On December 18, 2015, the House and Senate signed the “Protecting Americans from Tax Hikes Act of 2015” (PATH) into law.  Under this legislation, the $500,000 deduction limit ($2,000,000 purchases limit) of Section 179 was retroactively extended for application in 2015.  Unlike 2014 however, this bill extends the increased deduction/purchase limits for future years indefinitely (but it definitively applies for 2016).

The PATH act also extends 50% “bonus” depreciation retroactively to January 1, 2015.  In fact, this aspect of depreciation has effectively been extended through 2019, and it is available for all businesses purchasing new equipment during 2015, 2016, and 2017.  In 2018 and 2019, “bonus” depreciation is phased-down to 40% and 30%, respectively.

Here is a link to the official website of Section 179.

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