Depreciation Opportunities Provide Tax Deductions

Published on: Aug 25, 2021 by Rhett Reuter, CPA, MT

Updated on: January 28, 2026

Highlights:

Explains how depreciation strategies allow businesses to accelerate tax deductions, improving cash flow by recovering asset costs over shorter timeframes. Covers key depreciation methods, including bonus depreciation and Section 179 expensing, and how recent tax law changes expanded eligibility. Highlights the importance of asset classification and proactive planning to maximize depreciation benefits while maintaining compliance with tax regulations.

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For assets with a useful life of more than one year, the cost must be depreciated over a period of years. In most cases, the Modified Accelerated Cost Recovery System (MACRS) will be preferable to the straight-line method because you’ll receive a larger deduction in the early years of an asset’s life.

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But if you make more than 40% of the year’s asset purchases in the last quarter, you could be subject to the typically less favorable mid-quarter convention. When it comes to repairs and maintenance of tangible property, however, different rules may apply.

Careful planning during the year can help you maximize depreciation deductions in the year of purchase.

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Other depreciation-related breaks and strategies are also available and, in many cases, have been enhanced by the TCJA. These include:

• Bonus Depreciation
• Section 179 Expensing Election
• Tangible Property Repair Safe Harbors
• Cost Segregation Studies

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Rhett is a Principal with SVA Certified Public Accountants and works closely with businesses advising them on tax and accounting issues that may arise throughout the year. He provides guidance and support on a variety of issues including IRS and state audits, various tax credits, like-kind exchanges, and structuring and exiting deals.

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