Section 179 vs. Bonus Depreciation
Compare eligibility, limits, placed-in-service timing, taxable-income effects, recapture, and state conformity before buying equipment.
The practical answer
Compare eligibility, limits, placed-in-service timing, taxable-income effects, recapture, and state conformity before buying equipment. Confirm the facts and evidence first, apply the relevant rule second, and document the decision and follow-through.
Decisions to organize
Use these decision points to turn the topic into verifiable actions.
- List each asset and its business-use percentage
- Model current and future-year deductions
- Check state treatment separately
Evidence checklist
- Signed contracts, invoices, bank and payroll records
- Contemporaneous notes showing business purpose and dates
Forms and deadlines
- Review the relevant federal and state filing instructions for the tax year
- Retain source documents with the filed return workpapers
Issues to flag for review
- Calling a purchase deductible without testing business use and timing
- Ignoring depreciation, recapture, listed-property and state differences
- Building advisory dashboards on unreconciled books
- Treating tax savings as the only investment criterion
Frequently asked questions
What should I review before acting?
Compare eligibility, limits, placed-in-service timing, taxable-income effects, recapture, and state conformity before buying equipment.
When should professional review be added?
Add review when facts, forms, deadlines, elections, or consequences remain uncertain.
Sources and important note
General educational material based on the official sources below. Confirm tax-year facts and your individual circumstances before filing or acting.
Turn the guide into a plan.
Bring the records, questions, and deadlines that apply.