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Tax Amendment Updates

Section 179 Tax Changes Impact HVAC Investments

With the Tax Cuts and Jobs Act that passed into law on January 2, 2018 several changes to Section 179 of the tax code were implemented that may help building owners save big on their HVAC investments and improvements.

Learn more about what has changed or try our easy Section 179 Savings Calculator below.

Learn More About the Tax Change

Section 179 Changes

HVAC Qualifies

HVAC Systems & Components are now among the capital investments that can be deducted as an expense. Prior to the change, HVAC equipment had to be depreciated over 39 years. As an example, a $350,000 HVAC upgrade would now allow $73,500 in first year tax savings (assuming a 21% tax rate).

See how the change impacts the cost of your project using our calculator below.

Section 179 Changes

Limit Doubled

Prior to the 2018 change, the limit on the Section 179 deduction was $500,000. That amount doubled with the change, meaning that projects up to $1,000,000 can be fully deducted as a business expense. The limit on equipment purchases has increased to $2,500,000.

To make matters even better, bonus depreciation has doubled as well from 50% to 100%, good through 2022 and has been made retroactive to 9/27/2017.

Savings Calculator Tool

$
Section 179 Deduction:
Bonus Depreciation
Normal 1st Year Depreciation:
Total First Year Deduction:
Cash Savings on Your Purchase:
(assuming a 21% tax bracket)
Total Lowered Cost of Equipment:
(after Tax Savings)

This calculator is for illustrative purposes only and is based on a typical tax scenario that may not apply to your business. This web page and the calculator tool are not tax advice. Please consult your tax advisor or professional for how these code changes and potential equipment purchases will impact your tax situation.

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