Both §179 and bonus depreciation enable taxpayers to deduct the cost of newly acquired property the year they put the property into service. For assets placed in service in 2023, §179 allows up to 100% of the cost as a current-year deduction, while bonus depreciation only includes 80% of the cost of the property. Deductions for certain kinds of leased property are restricted under §179 but not bonus depreciation.
The following table highlights additional ways the two provisions compare.
The above text and table is adapted from the 2023 University of Illinois Federal Tax Workbook, Chapter 7: Depreciation.
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[…] Section 179 is particularly beneficial for companies aiming to make significant upgrades without a long-term financial burden. It’s an ideal choice for those prioritizing upfront tax relief. […]