Video instructions and help with filling out and completing Can Form 4797 Deluxe

Instructions and Help about Can Form 4797 Deluxe

Hi Dan would occur its talk to you about some developments within depreciation and proper deductions for depreciation within a business that can save you substantial money if they're applied properly first thing I want to talk about is the path act of 2015 signed late 2015 that permanently extended section 179 what does that mean to you that means that you can take up to a half a million dollar deduction for equipment that is purchased and placed in service in 2017 for certain SUVs that's capped at twenty five thousand dollars a couple of things to be careful for here is it can be limited to taxable income so if you don't have taxable income it's reduced to taxable income you can't take taxable income below zero so you can't create a loss with it the next thing if you purchase more than two million and $30,000 in equipment you start to phase out that half a million dollars dollar-for-dollar when you get over that the thing to be careful for with in section 179 is depreciation recapture if you buy equipment vehicle and you later sell it you may have to recapture all or part of that and bring it back in to income so that's something to be careful for and to plan for as you're doing this the next piece that I want to talk about within within depreciation is what's called bonus depreciation or section one 68k so that was a provision that was extended through 2019 for 2017 you can deduct up to fifty percent of the cost of the equipment for 2018 up to forty percent of the cost of the equipment and in 2019 up to thirty percent of the cost of the equipment bonus depreciation is a little bit different than section 179 while they both work together bonus depreciation only works with new assets where section 179 you can buy used assets or new assets and take the deduction with section 168 or bonus there is no taxable income limitation so you actually can use it to take a loss from an ordering perspective bonus depreciation is used after you take section 179 so first you apply the rules of section 179 and then you apply the rules of bonus as far as what property is eligible first it has to be new tangible personal property with a makers tax life of twenty years or less and then computer software that does not fall under section 179 I'm sorry 197 so really what that means is is computer software typically off-the-shelf software is depreciated over three years or thirty six months so all of that qualifies under bonus section once it's a bonus is an automatic so if you don't want to take section 160 a bonus you have to elect out of it that's something that's very easily done on a tax return so within depreciation you can see there's a lot of complex things that can save you a substantial amount of money attached to this video please find a deeper discussion on both the section 179 and bonus depreciation if you add V if you have any questions please feel free to give our office a call thank you