Depreciation

Section 179 Expensing Election:

This allows you to deduct (rather than depreciate over a number of years) the cost of purchasing eligible new or used assets, such as equipment and furniture. The expensing limit for 2016 and 2017 is $500,000.

You can claim the election only to offset net income from a “trade or business,” not to reduce it below zero to create a loss.

50% Bonus Depreciation:

This additional first-year depreciation for qualified assets is available for 2016 and 2017.

Qualified assets include new tangible property with a recovery period of 20 years or less (such as office furniture and equipment) and off-the-shelf computer software.

Accelerated Depreciation:

A break allowing a shortened recovery period of 15 years — rather than 39 years — for qualified leasehold-improvement, restaurant and retail-improvement property.

Cost Segregation Study:

If you’ve recently purchased or built a building or are remodeling existing space,  consider a cost segregation study. It identifies property components that can be depreciated much faster, increasing your current deductions. Typical assets that qualify include decorative fixtures, security equipment, parking lots and landscaping.

Tax Planning Strategy:

Use the Section 179 deduction if you have a big income year. Otherwise consider using normal depreciation.