Let Bonus Depreciation Open The Door To Office Upgrades In 2024
Bonus depreciation can be confusing. We're here to help provide insight, guidance, and explain why 2024 is the year for furniture upgrades.
We all know what “depreciation” is. If you’ve ever bought a new car, you surely experienced it first-hand the moment you drove off the lot. In business, depreciation is just as real, but it can also be a real financial benefit, allowing you to spread the cost of certain assets out over their useful lives. Depreciation is essentially a reflection of the useful lifespan of an asset, allowing you to write off its cost over time.
Which brings us to bonus depreciation. For businesses looking to invest in assets like furniture in 2024, bonus depreciation could be their best financial friend.
What is bonus depreciation?
Bonus depreciation is essentially a tool for accelerating the deductions that are normally spread out over the useful life of an asset. A business or organization using bonus depreciation can instead realize a large percentage of that entire deduction in year one, thereby reducing its tax liability and helping to offset the total cost.
But there’s a catch.
Bonus depreciations are, sadly, being phased out. The overall size of the bonus depreciation a business can declare is being lowered annually. In 2023, it was 80% of the purchase. This year, it’s 60%. And in 2025? 40%. Unless the program is extended, bonus depreciations will be reduced to zero by 2027.
That means that 2024 could be your best year for investing in furniture or interior upgrades, since a full 60% of the purchase cost can be deducted. Bonus depreciation could be the difference between making that needed capital expenditure or putting it off longer than you should.
Coming next month: we’ll show you exactly how put bonus depreciation to work. Of course, if you can’t wait that long, contact our team today!