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