Tax rules are complicated and 1sourcevend recommends checking with your accountant to see how these new rules may impact your business. The following is for informational purposes only, and is not intended as tax, legal or accounting advice.
The Tax Cuts and Jobs Act (TCJA) was enacted at the end of 2017 and doubled the amount that businesses can write off for equipment purchases, including vending machines. This helps businesses reduce their taxable income in the year they purchase equipment, offsetting some of the cost.
The Tax Cuts and Jobs Act increased the 2018 bonus depreciation rate to 100%. This allows businesses to write off the full cost of up to $1 million in new equipment in the first year the equipment is owned, double the maximum amount allowed previously.
For distributors looking to invest in inventory control software and industrial vending solutions, there’s no better time to take advantage of these special tax rates. Starting in 2023:
- Bonus depreciation rates will automatically reduce by 20 percentage points every year.
- Bonus depreciation rates will bottom out at 20% in 2026, before disappearing altogether.
For more insight on the tax law, read the full article here.