For qualifying assets (including expenditures for certain building improvements) placed in service in tax years beginning in 2018, the maximum Section 179 first-year depreciation deduction is increased to $1 million (up from $510,000 for 2017). The TCJA also expanded the definition of qualifying assets to include depreciable tangible personal property used mainly in the furnishing of lodging (furniture, appliances, etc.).
The definition of qualifying real property eligible for the Section 179 deduction was also expanded to include eligible expenditures for roofs, HVAC equipment, fire protection and alarm systems, and security systems for nonresidential real property.
These favorable Section 179 deduction changes will deliver tax-saving benefits on many 2018 business returns, including returns for sole proprietors and owners of pass-through entities. However, Section 179 deductions are subject to several limitations. Consult your tax pro for full details.
Key Point: When both 100% first-year bonus depreciation and the Section 179 deduction privilege are available for the same asset, you should generally claim 100% bonus depreciation because there are no limitations on that break.