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Occasionally, commercial entities upgrade assets – simple fixtures or complex machinery. Under the Tax Cuts and Jobs Act (TCJA) passed late last year, bonus depreciation was significantly enhanced.

Old law: Qualified new – not used – assets placed in service before September 28, 2017, fall under pre-TCJA law. For these items, you can claim a 50% first-year bonus depreciation deduction. This tax break is available for the cost of new computer systems, software, vehicles, machinery, equipment, furniture, and so forth.

New law: Bonus depreciation improves significantly under the TCJA. For qualified property placed in service from September 28, 2017, through December 31, 2022, the first-year bonus depreciation percentage is increased to 100%. In addition, the 100% deduction is allowed for both new and used qualifying property.

In later years, bonus depreciation is scheduled to be reduced to 80% for property placed in service in 2023, 60% for property placed in service in 2024, 40% for property placed in service in 2025, and 20% for property placed in service in 2026.

If you buy, you’ll likely enjoy the enhanced bonus depreciation deduction.

With over 20 years of experience in public accounting, Amanda Bechen CPA owns Bechen & Company PC located in Wagner, SD, and can be contacted at 605-384-4200 or