Bonus depreciation has been reduced to 80%
- Yes, there has been a change in the tax law regarding the bonus depreciation percentage.
- Previously, the bonus depreciation percentage was 100%, allowing businesses to deduct 100% of the cost of qualified assets placed in service that year.
- The reduction to 80% means that now businesses can only deduct 80% of the cost of qualified assets in the first year.
- This reduction in the bonus depreciation percentage will mean businesses will get a smaller tax deduction in the first year for new assets and it will be cut 20% each year thereafter until it hits zero.
In summary, the reduction in bonus depreciation percentage to 80% means businesses will now get a smaller tax break on new asset costs compared to before, spreading deductions over more years.