New 100% Depreciation Deduction Benefits Businesses

Do you own or manage a business? New tax reform legislation may allow your business to write off your depreciable business assets in the year the assets are placed in service. Abajian Law is ready to help your business navigate the new tax legislation and reduce your business taxes.

Tax Cuts and Jobs Act of 2017

The Tax Cuts and Jobs Act of 2017 (“the Act”) was signed into law on December 22, 2017. The majority of the Act’s changes went into effect January 1, 2018. The Act amends several sections of the Internal Revenue Code of 1986. These amendments include changes that may benefit your business, like new tax rate reductions for businesses and individuals. As a a law group staffed with a former IRS trial attorney, Abajian Law knows this country’s tax code and legislation inside and out. Our team is ready to help you maneuver through the complexity of tax law, and stay up to date on the latest changes that can benefit your business.

How Can the Act Help Me?

If you own or manage a business, you need to know about how the Act can help you. One of the changes in the Act allows your business to write off most depreciable business assets in the year the assets are placed in service. The 100% depreciation deduction applies to depreciable business assets, and other specific property, with a recovery period of 20 years or less. For your business, this might mean machinery, equipment, furniture, computers, or appliances. The Act allows for the deduction to apply to qualified assets acquired and put into service after September 27, 2017. The Act’s changes for the deduction are effective through 2022.

What Types of Property Qualify?

Property must meet the following requirements in order to qualify for the 100 percent depreciation deduction:

1. The property must be of a specified type
2. The use of the depreciable property must begin with the taxpayer, or the property must meet the requirements of proper acquisition
3. The property must be put into service within a specified date
4. The property must be acquired by the taxpayer after September 27, 2017

Abajian Law is ready to help your business assess which assets qualify for the 100 percent deduction — a task which may be difficult or impossible on your own.

How To Claim the Deduction

Your business may opt-out of the 100 percent depreciation deduction. In order to do so, you must file a return in a timely fashion. To claim your deduction, utilize the Form 4562. This form allows you to claim your deduction for depreciation and amortization and expense specific property.

If you have questions on how to properly and effectively claim the 100 percent deduction, contact Abajian Law for your tax law needs. Abajian Law knows IRS code and requirements because they are staffed with attorneys that have years of experience working closely with the IRS. When it comes to assessing updates to the tax code and how they affect your bottom line, Abajian Law is here to help.