Perhaps. Each person has their own idea about what might work best for them. Here are some pieces of information about this topic and it's important to remember that all depreciation, including Section 179 must be recapture at some point. Section 179 requires recapture (an amount added back to your income) when business use drops to 50% or less.
You can deduct your entire Investment no matter how much you spend per year. Bonus Depreciation deduction can be larger than your business income. Unlike the Section 179 deduction, Bonus Depreciation must apply to 100% of an asset's cost and all assets must be in the same category.
- Category simply means the class life or the recovery period (5 or 7 or 15 year recovery for example).
You can take both Section 179 and Bonus Depreciation allowances, but Section 179 must be applied first, and any amount over the $1,080,000 limit (maximum for 2022, limited by income and possibly carried over to the next tax year) to Section 179 may then be taken in bonus depreciation. For tax year 2022, the Bonus Depreciation allowance is 100%.
In general, taxpayers may elect out of bonus depreciation for any qualifying property placed in service during the taxable year. The election applies to all property of the same property class that is placed in service by the taxpayer in the same year.
@The Numbers Agent
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