A business owner installs new fire and security products with equipment and installation cost of $2,000,000. Under previous depreciation rules, the business owner would claim approximately $51,282 in depreciation deductions annually over 39 years for a year one net equipment cost of $1,989,230.
Under the new law, the owner now may deduct the full equipment and installation cost of $2,000,000 from their business income the year of purchase and installation. At the business tax rate of 21%, this saves the business owner $420,000 in taxes, effectively lowering the cost of the equipment.
*Consult your tax professional for specific business advice.