How to Maximize Depreciation on Your Business Assets

Understanding how to maximize depreciation on your business assets can have a significant impact on your bottom line. Depreciation allows you to deduct a portion of an asset's cost over time, helping to offset income and reduce tax liabilities. Here’s how to get the most out of this valuable tax-saving strategy.

1. Use Section 179 Expensing
Section 179 allows businesses to write off the full cost of qualifying assets in the year they’re placed in service, rather than depreciating over years. Eligible assets often include equipment, machinery, and certain technology, so consider this option for faster tax savings.

2. Leverage Bonus Depreciation
For assets not eligible for Section 179, bonus depreciation provides another option. Currently, businesses can deduct up to 60% of qualifying assets immediately, which is beneficial for expensive equipment. Review your asset list with your accountant to determine which items qualify.

3. Regularly Reevaluate Your Depreciation Schedule
As tax laws change, your approach to depreciation should too. Regularly reviewing your depreciation schedule allows you to take advantage of updated regulations and to make adjustments as necessary.

4. Track Small, Depreciable Assets
From office furniture to small tech devices, these often-overlooked items can add up. Maintain a detailed inventory so you can claim all eligible deductions.

By maximizing depreciation, you’re not only reducing taxable income but also freeing up resources to reinvest in your business. For specific guidance, consult with a tax professional to tailor these strategies to your unique asset portfolio.