The IRS recently announced various inflation-adjusted federal income tax amounts for next year, including those for Section 179 deductions. For tax years beginning in 2024, small businesses can potentially write off up to $1,220,000 of qualified asset additions in year one (up from $1,160,000 for 2023). However, the maximum deduction amount begins to be phased out once qualified asset additions exceed $3,050,000 (up from $2,890,000 for 2023). Various limitations apply to these deductions. Also, keep in mind that under the (separate) bonus depreciation break, you can deduct up to 60% of the cost of qualified asset additions placed in service in 2024. For 2023, you could deduct up to 80%.
