2022 Tax Incentives for Manufacturing Companies
Section 179 Federal Tax Deduction increased to $1,080,000
Section 179 Federal Income Tax Deduction: This deduction allows a company to deduct the first $1,080,000 of equipment (Section 179 Property) acquired in 2022 from their taxable income. For companies acquiring up to $2,700,000 of equipment, this deduction is available in full. It then phases out on a dollar-for-dollar basis for amounts over $2,700,000. Financing or leasing with a $1 buyout qualifies.
100% Bonus Depreciation
In addition to the $1,080,000 write-off, companies can take 100% bonus depreciation on the adjusted basis of their qualified equipment acquired in 2022. This bonus depreciation is good through 2022. Financing or leasing with a $1 buyout qualifies.
In addition to the $1,080,000 write-off and bonus depreciation, companies may be eligible to deduct federal depreciation on the adjusted basis of their qualified equipment, state depreciation, local tax incentives, and interest expenses. Financing or leasing with a $1 buyout qualifies.
If you have questions about how to apply these deductions to your company, give MHCS CPA a call. We specialize in manufacturing companies and can help you wade through the red tape.