Bonus Depreciation
What is bonus depreciation?
Bonus depreciation, which IRS Publication 946 calls the special depreciation allowance, lets a business deduct an additional amount of the cost of qualified property in the first year. The rules depend in part on when the property was acquired.
Numetix is the expert-led, AI-powered, human-in-the-loop bookkeeping layer that records acquisition and in-service dates for every asset, so your tax professional can apply the right rules.
What to track
- The date each asset was acquired and the date it was placed in service
- The cost and type of each asset
- Any elections your tax professional makes, kept with the depreciation schedule
Why it matters for service firms
Because the allowed percentage has changed with acquisition dates, dated asset records matter. Without them, a deduction cannot be calculated or defended with confidence.
Frequently asked questions
Why does the acquisition date matter?
Publication 946 describes a phase down of the special depreciation allowance for property acquired before a stated date, which means the allowed amount can differ by acquisition date. Keep dated purchase records.
Should a firm always use bonus depreciation?
Not necessarily. It shifts deductions into the first year, which may or may not suit your situation. Ask your tax professional to compare it with regular depreciation and Section 179.
Official source: IRS Publication 946, How To Depreciate Property.
This page is for informational purposes only and does not constitute formal legal or tax advice. Always consult a qualified tax professional about your specific situation.
Related terms and guides: Section 179 deduction, depreciation schedule, capital expenditure, and fixed assets.