Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment purchased or financed during the 2020 tax year, up to $1,000,000.
The total amount of equipment purchased must not exceed $2,500,000. The deduction will begin to phase out on a dollar-for-dollar basis after $2,500,000 is spent.
Equipment must be purchased and placed into service by midnight on December 31, 2020.
The Tax Cuts and Jobs Act also increases the benefit of bonus depreciation to 100%, allowing businesses of all sizes to deduct the full cost of qualifying new and used equipment purchased and placed in service December 31, 2023.