Unless the law changes, the bonus percentage will decrease by 20 points each year for property placed in service after December 31, 2022, and before January 1, 2027. The 100% write-off of eligible property expired December 31, 2022. The passage of the Tax Cuts and Jobs Act (TCJA) in 2017 significantly changed the rules for bonus depreciation by allowing businesses to immediately write off 100% of the cost of eligible property acquired and placed in service after September 27, 2017, and before January 1, 2023. The remaining cost can be deducted over multiple years using regular depreciation methods until it phases out. Bonus depreciation - also known as the additional first-year depreciation deduction or the 168(k) allowance - accelerates by allowing businesses to write off a large percentage of an eligible asset's cost in the first year it was purchased.
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