Under Section 179 of the Internal Revenue Code, companies can “expense” the full cost of qualifying fixed assets to reduce their taxable income. This means they can deduct the purchase amount currently rather than having to depreciate the asset over many years. Both new and used fixed assets can qualify. The election is available for qualified property placed in service anytime during the year, up to year end. For 2024, the maximum overall deduction allowed is $1.22 million ($1.16 million for 2023). The total asset purchase limit for 2024 is $3.05 million ($2.89 million for 2023), after which the deduction for the year is reduced dollar-for-dollar until it’s eliminated.
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