Top 5 Small Business Tax Changes: Part 2

Top 5 Small Business Tax Changes: Part 2

3Take advantage of bonus depreciation: For the next five years, your business can claim 100% bonus depreciation for qualified property, which is up from 50% in 2017. After 2022, this deduction is reduced incrementally until it disappears in 2026. What this means is that equipment and certain other business property, such as qualified trucks, vans, and SUVs can be written off in one year. Even better, there is no overall purchase limitation on this deduction.

4Buy a new or used luxury car: Prior to 2018, Congress put severe limits on the ability to write off luxury cars like, BMW and Cadillac. The depreciation limit in year one was a paltry $3,160 and not much more in years two and later.

However, as a result of the new tax law, yearly depreciation limits on all cars have tripled. Thus, prior to 2017, it would have taken you 18 years to write off a $50,000 BMW. If that vehicle were bought today, it would take only 5.3 years to write off the same car.

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