Section 179, bonus depreciation, MACRS, vehicles, leasehold improvements, cost segregation, and the repair versus capitalize decision.
46 guides, each reviewed by a CPA licensed in the US and Canada.
Both bonus depreciation and Section 179 allow full expensing of asset purchases, but they have different limitations, requirements, and use cases.
Small Business & BookkeepingBoth Section 179 and 100% bonus depreciation allow full first-year deduction of asset costs, but they differ in loss treatment, income limits.
Small Business & BookkeepingBusinesses can depreciate assets using MACRS (accelerated), Section 179 (immediate), bonus depreciation (100% per OBBBA), or straight-line.
Small Business & BookkeepingThe business vehicle deduction is one of the most commonly claimed and most commonly audited deductions for small businesses.
Small Business & BookkeepingWhen a business owner uses a personal vehicle for both business and personal purposes, only the business-use percentage is deductible.
Small Business & BookkeepingBusiness owners who use their personal vehicle for business have two methods to calculate the deduction. Standard mileage rate vs.
Small Business & BookkeepingBusiness owners who use a personal vehicle for work can deduct expenses using either the standard mileage rate (70 cents per mile for 2025) or the actual.
Small Business & BookkeepingUsing a personal vehicle for business creates a deduction worth $3,500-$15,000/year for most small business owners. Covers key rules, filing requirements,.
Small Business & BookkeepingThe business vehicle deduction is the largest deduction for many small businesses. Standard mileage (70 cents/mile in 2025) is simpler.
Small Business & BookkeepingBusiness owners choose between standard mileage rate (70 cents/mile in 2025) and actual expenses for vehicle deductions.
Small Business & BookkeepingVehicles over 6,000 lbs GVWR qualify for full Section 179 or bonus depreciation (no IRC 280F luxury auto limits). Includes IRS rules, documentation.
Small Business & BookkeepingSelf-employed business owners who use a personal vehicle for business can deduct either the standard mileage rate or actual vehicle expenses.
Small Business & BookkeepingBusiness vehicle deductions come in two methods: standard mileage (70 cents/mile in 2025, simpler) or actual expenses (gas, insurance, repairs.
Small Business & BookkeepingBuy vs. lease tax comparison: Purchasing (depreciation method): - Passenger vehicles (under 6,000 lbs GVWR): subject.
Small Business & BookkeepingBuying equipment allows Section 179 expensing and bonus depreciation. Leasing provides fully deductible payments and preserves cash.
Small Business & BookkeepingA cost segregation study reclassifies components of a commercial building from 39-year (or 27.5-year residential) depreciation to 5-year, 7-year.
Small Business & BookkeepingA cost segregation study reclassifies building components from 39-year to 5, 7, or 15-year property, accelerating depreciation.
Small Business & BookkeepingA cost segregation study reclassifies 20-40% of a commercial building's cost from 39-year to 5, 7, or 15-year property, eligible for bonus depreciation.
Small Business & BookkeepingA cost segregation study reclassifies building components from 39-year to 5, 7, or 15-year property, accelerating depreciation deductions.
Small Business & BookkeepingA cost segregation study is an engineering-based analysis that reclassifies components of a building from 27.5-year (residential) or 39-year (commercial).
Small Business & BookkeepingA cost segregation study is an engineering-based analysis that identifies and reclassifies components of a commercial building from the standard 27.5-year.
Small Business & BookkeepingA cost segregation study reclassifies building components from 39-year (commercial) or 27.5-year (residential) depreciation to 5, 7, or 15-year property.
Small Business & BookkeepingThe tax code provides multiple depreciation methods for business assets.
Small Business & BookkeepingDepreciation is how businesses deduct the cost of long-lived assets (equipment, vehicles, machinery, furniture, computers) over time.
Small Business & BookkeepingSection 179 lets you deduct the full cost of equipment in Year 1 (up to $2,500,000 in 2024).
Small Business & BookkeepingDepreciation recapture is the tax you pay when you sell a business asset for more than its depreciated (adjusted) basis.
Small Business & BookkeepingWhen you sell a business asset for more than its depreciated value, the IRS recaptures the depreciation deductions you took.
Small Business & BookkeepingSelling depreciated business assets triggers depreciation recapture under IRC Sections 1245 (equipment) and 1250 (real property).
Small Business & BookkeepingSmall businesses can claim tax credits for energy-efficient improvements under several provisions: the Clean Vehicle Credit (IRC 30D.
Small Business & BookkeepingUnder IRC 183, if a business doesn't show a profit in 3 of 5 consecutive years, the IRS may reclassify it as a hobby. IRC 183 hobby loss rules: The 3-of-5.
Small Business & BookkeepingThe home office deduction (IRC 280A) allows business owners who use part of their home regularly and exclusively for business to deduct a portion.
Small Business & BookkeepingThe decision to lease or buy business equipment involves trade-offs between immediate tax deductions, cash flow preservation, and total cost of ownership.
Small Business & BookkeepingBuying equipment gives you Section 179 and bonus depreciation upfront. Leasing spreads the deduction over the lease term.
Small Business & BookkeepingBuying equipment offers Section 179 immediate expensing and bonus depreciation. Leasing preserves cash and provides ongoing deductions.
Small Business & BookkeepingThe Modified Accelerated Cost Recovery System (MACRS) under IRC 168 is the primary depreciation system for most business property placed in service.
Small Business & BookkeepingWhen Section 179 and bonus depreciation don't fully apply, MACRS (Modified Accelerated Cost Recovery System) determines how business assets.
Small Business & BookkeepingRental real estate activities can qualify for the 20% qualified business income (QBI) deduction under IRC 199A if the activity rises to the level.
Small Business & BookkeepingReal estate investors can defer gains with 1031 exchanges, accelerate depreciation with cost segregation studies, and deduct losses with REPS.
Small Business & BookkeepingSection 179 and 100% bonus depreciation allow small businesses to deduct the full cost of equipment, vehicles.
Small Business & BookkeepingSection 179D of the Internal Revenue Code provides a deduction for energy-efficient improvements to commercial buildings.
Small Business & BookkeepingBefore the Tax Cuts and Jobs Act (TCJA), business owners could trade in equipment, vehicles. post-TCJA equipment trade-in treatment.
Small Business & BookkeepingRental real estate is the most tax-advantaged asset class in the U.S. Depreciation, 1031 exchanges, and cost segregation can defer or eliminate the tax.
Small Business & BookkeepingLeasehold improvements (also called tenant improvements or build-outs) are permanent improvements made to leased commercial space by either the tenant.
Small Business & BookkeepingBusiness vehicles over 6,000 pounds GVWR (SUVs, trucks, vans) can be fully deducted in Year 1 using Section 179 (up to $31,300 SUV cap for 2025) plus.
Small Business & BookkeepingThe standard mileage rate for 2025 is 70 cents per mile. The actual expense method deducts fuel, insurance, repairs, depreciation, and registration.
Small Business & BookkeepingBonuses are deductible when properly accrued and paid within 2.5 months of year-end (the IRC 267/404(a)(5) rule for related parties).