Tax Reform Tax Tip 2018-68: Changes to Depreciation Affect Businesses Now

 

IRS Tax Tips May 3, 2018

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Issue Number: Tax Reform Tax Tip 2018-68: Tax Reform: Changes to Depreciation Affect Businesses Now As employers across the country celebrate National Small Business Week, the IRS reminds businesses that the passage of the Tax Cuts and Jobs Act may affect their depreciation deductions and taxes. Business taxpayers can generally depreciate tangible property except land, including buildings, machinery, vehicles, furniture and equipment. Changes to depreciation and how they will affect businesses may include: •Businesses can immediately expense more under the new law; taxpayers may elect to expense the cost of any property and deduct it in the year the property is placed in service. •Maximum deduction increased from $500,000 to $1 million. •The phase-out threshold increased from $2 million to $2.5 million. •The new law allows taxpayers to elect to include improvements made to nonresidential property. The improvements must have been made after the date the property was first placed in service. These improvements include:  Any improvement to a building's interior Roofs Heating and air conditioning systems Fire protection systems Alarm and security systems Improvements that do not qualify: Enlargement of the building Service to elevators or escalators Internal structural framework of the building These changes apply to property placed in service in taxable years beginning after December 31, 2017. Share this tip on social media -- #IRSTaxTip: Tax Reform: Changes to Depreciation Affect Businesses Now. https://go.usa.gov/xQ8ux Back to Top Thank you for subscribing to IRS Tax Tips, an IRS e-mail service. For more information on federal taxes please visit IRS.gov. This message was distributed automatically from the IRS Tax Tips mailing list. Please Do Not Reply To This Message.

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