2018 Deduction Limit = $1,000,000
This deduction is good on new and used equipment, as well as off-the-shelf software. This limit is only good for 2018, and the equipment must be financed/purchased and put into service by the end of the day, 12/31/2018.
2018 Spending Cap on equipment purchases = $2,500,000
This is the maximum amount that can be spent on equipment before the Section 179 Deduction available to your company begins to be reduced on a dollar for dollar basis. This spending cap makes Section 179 a true “small business tax incentive”.
Bonus Depreciation: 50% for 2018
Bonus Depreciation is generally taken after the Section 179 Spending Cap is reached. Note: Bonus Depreciation is available for new equipment only.
The above is an overall, “simplified” view of the Section 179 Deduction for 2018. Please contact your accountant or refer to IRS rules for specific questions or details.