Thinking about pushing your buying decisions into 2024? Consider the benefits of receiving this year’s bonus tax depreciation if you purchase a truck before the end of this year. Here are two options worth considering for your business:
Section 179
Section 179 allows taxpayers to deduct a set dollar amount of an asset’s cost upfront. Eligible businesses can deduct the full price of qualifying new or used equipment in the year of purchase. To take the full deduction, the purchase price of the eligible property cannot exceed $1,160,000, an increase of $80,000 from 2022.
Section 168(k)
Under section 168(k), businesses can deduct a large percentage of an asset’s cost, also known as bonus depreciation. This year, businesses may elect for an 80% bonus depreciation. Each year moving forward, bonus tax depreciation will decrease by 20%. There is no dollar limit on the amount of property that you can purchase that can qualify for bonus depreciation.
How it works
First, select a new or used truck from your local MHC dealer. Then, consult with a tax advisor to confirm the equipment qualifies for Section 179 expensing or Section 168(k) bonus depreciation. Lastly, purchase and utilize the equipment.
To learn more about additional benefits for your business, contact us here. For more information on Section 179 expensing or Section 168(k) bonus depreciation, visit the IRS website here.
This summary was written to support the promotion or marketing of the matter addressed above and is not tax advice provided by Murphy-Hoffman Company or MHC Kenworth. The taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.