The Tax Cuts and Jobs Act, which is expected to be signed into law this week offers some generous write offs for the purchase of qualified property. For qualified purchases placed in service after Sept. 27, 2017; 100% of the purchase price can be expensed. This total expense provision will continue until the year 2023 when it will be phased down as follows: 2023- 80%; 2024- 60%; 2025-40%; 2026- 20% and 2027 -0%. The new law would follow the phase down of bonus depreciation of 50% for assets purchased prior to Sept. 27, 2017 but placed in service after that date.
Unlike the current law, an enticing provision has been added; states where qualified property includes property that has been used i.e., the original use does not have to originate with the purchaser. The new expensing rules are intended to improve operations and enhance the skill of workers to accelerate growth of jobs, productivity and wages.
To discuss further specifics of the new provisions and how the timing of your property purchases may be most beneficial to you with the other business tax law changes that are expected to be enacted, contact your professional at UHY LLP at one of our many locations.