Spreading the cost of business assets over their useful life instead of deducting all at once.
Depreciation allows you to recover the cost of business assets (equipment, vehicles, real estate) over their useful life as determined by the IRS. While Section 179 allows immediate deduction, regular depreciation spreads deductions over 3-7 years for equipment or 27.5-39 years for real estate.
Section 179 provides immediate tax benefits. Depreciation spreads deductions over time, which may be better in lower income years. AlphaTax can model both scenarios.
Bonus depreciation allows a large first-year deduction (60% in 2024) on qualifying assets. It's phasing down annually: 40% in 2025, 20% in 2026, then gone.
AlphaTax helps self-employed professionals maximize tax savings with AI-powered expense tracking.
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