Companies Consider Purchases Ahead of Bonus Depreciation Drop

The bonus depreciation set in the 2017 tax law will start to be phased out in 2023, and companies that are capital intensive are re-evaluating their purchasing plans.

Some companies will take advantage of an immediate write-off of costs associated with the purchase of capital goods, while others won’t change their buying decisions.

Bonus depreciation, when companies can expense capital expenditures immediately for tax purposes, was increased in 2017 to 100% from 50% for property acquired and placed in service before 2023, as a way to spur economic growth. The immediate write-off of costs encourages companies to invest ...