Tax Concepts

Bonus Depreciation

Bonus depreciation is a rule that allows qualifying property to be deducted faster than normal depreciation schedules would permit.

Quick answer

Bonus depreciation is a rule that allows qualifying property to be deducted faster than normal depreciation schedules would permit.

It matters because it can accelerate deductions into earlier years and change the timing of taxable income.

A business buying qualifying equipment may write off a larger portion in the first year under bonus depreciation.

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Plain-English Definition

What Bonus Depreciation means

Bonus depreciation is a rule that allows qualifying property to be deducted faster than normal depreciation schedules would permit.

Why it matters It matters because it can accelerate deductions into earlier years and change the timing of taxable income.
Simple example A business buying qualifying equipment may write off a larger portion in the first year under bonus depreciation.
Related Questions

Questions people ask about Bonus Depreciation

What does Bonus Depreciation mean?

Bonus depreciation is a rule that allows qualifying property to be deducted faster than normal depreciation schedules would permit.

Why does Bonus Depreciation matter?

It matters because it can accelerate deductions into earlier years and change the timing of taxable income.

What is a simple example of Bonus Depreciation?

A business buying qualifying equipment may write off a larger portion in the first year under bonus depreciation.

When should I ask a CPA about Bonus Depreciation?

Ask a CPA when the term affects your tax bill, estimated payments, deductions, or a planning move before year end.

How is Bonus Depreciation different from Section 179?

Bonus Depreciation means Bonus depreciation is a rule that allows qualifying property to be deducted faster than normal depreciation schedules would permit. Section 179 means Section 179 is a tax rule that allows a business to elect immediate expensing of qualifying property up to annual limits. The difference is that they apply to different tax, accounting, or business situations and should not be treated as interchangeable.

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