When it comes to investing in new and used capital equipment for your business, there are two key tax benefits that can help you save money: Section 179 and Bonus Depreciation. Understanding how these two benefits work together can significantly reduce your tax burden.
Section 179 Deduction
Section 179 allows you to deduct the full cost of new and used capital equipment purchases, though an investment cap does apply. The deduction limit for this benefit is $2,500,000.
Bonus Depreciation
Bonus depreciation allows you to take additional depreciation on purchases of new and used (new to you) capital equipment. This can be combined with Section 179 deduction for even greater savings.
It’s important to note the changes to the bonus depreciation schedule. While the previous schedule showed a gradual decrease, bonus depreciation returns to 100% for property acquired and placed in service after January 19, 2025.
Important: This information is provided by your John Deere dealer and John Deere Financial as customer service, but it should not be considered tax advice. It is strongly recommended that you consult with your tax advisor to understand how these tax advantages apply to your specific situation.
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