Difference Between 179 expense and Bonus Depreciation

Question

Accepted Answer

179 expense and Bonus Depreciation are both tax deductions for business assets, but differ in their application and limitations.

179 expense allows businesses to deduct the full cost of qualifying assets in the year they are purchased, up to a certain limit.
Bonus Depreciation allows businesses to deduct a percentage of the cost of qualifying assets in the year they are purchased, with no limit.
179 expense is limited to $1,050,000 for 2021, while Bonus Depreciation is set at 100% for 2021.
179 expense can only be used for new or used tangible personal property, while Bonus Depreciation can be used for new or used property, including qualified improvement property.
Both deductions can be used in conjunction with each other, but the amount of Bonus Depreciation is reduced by the amount of 179 expense taken.

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