In 2017 the tax code allowed business owners to take a higher commercial HVAC tax deduction for the purchase and installation of both new and used heating and air conditioning equipment. New heating and cooling equipment can help your Atlanta business save at tax time. It provides the funds you need to grow and advance your business while updating your facility!
Commercial HVAC Tax Code Updates
The Tax Cuts and Jobs Act of 2017 implemented changes in commercial HVAC tax deductions for equipment depreciation. IRS Tax Code Section 179 for Small Business Expensing allows small business owners to deduct the total cost of installation and purchase of a new commercial heating and cooling system in the same year.
Previously, the only option was to depreciate the cost of a commercial HVAC system over a 39-year period. This depreciation offered only a small deduction each year for the equipment’s expense.
As of January 1, 2018, commercial HVAC equipment purchases are no longer considered a capital improvement. They can depreciate in full in the first year.
Business owners can deduct up to $1 million of expenses related to new and used heating and cooling equipment purchases of up to $2.5 million in the first year.
Used HVAC equipment is also eligible for commercial HVAC tax bonus depreciation, from 50 to 100 percent when it meets certain conditions:
- Taxpayer must acquire the property and put into service between December 21, 2017 and January 1, 2023.
- The taxpayer did not use the property any time prior to acquiring it.
- Taxpayer did not acquire the property from a relative.
- The taxpayer did not acquire the property from a component member belonging to a controlled group of corporations.
- The basis of the used property for the taxpayer isn’t configured in whole or part by reference to the adjusted basis of the property, in the hands of the transferor or seller.
- The basis of the used property for the taxpayer isn’t configured under the provision for determining the basis of property gained from a decedent.
Benefits of the Commercial HVAC Tax Deduction
Changes to Section 179 for commercial HVAC tax offer great advantages for business owners. Depreciating 100 percent of equipment and installation costs allows your businesses to maximize your commercial HVAC tax deduction this year. This may significantly lower your tax bill and therefore, free up cash to reinvest in your business.
The greater commercial HVAC tax savings is a serious benefit. This is especially true for small business owners, because lower tax bills make a big difference.
The commercial HVAC tax deduction offers significant savings. Depending, of course, on your business’s taxable income and costs related to HVAC equipment purchase and installation.
Allocate these funds to critical areas and reinvest in your business where it matters most for growth and hitting your 2019 goals.
Before purchasing new equipment, talk to your tax professional to verify savings from the new commercial HVAC tax deduction rule. Let your tax professional assist you with the proper forms to take advantage of the commercial HVAC tax deduction.
Estes Commercial Here to Maximize Your Commercial HVAC Tax Benefits
Take advantage of the tax code changes and install new heating and cooling equipment for your commercial building now. Estes Commercial offers quick, professional installation of commercial HVAC equipment for your business.
So contact us today to learn more. We serve business customers in and around Atlanta, including Buckhead, Kennesaw, Peachtree City, Midtown, Fayetteville, Decatur, Johns Creek and Roswell. We also provide HVAC services in Sandy Springs, Virginia Highland, Marietta, Dunwoody and Druid Hills.