What’s New for Fixed Assets in 2021?

Every year Depreciation tax has new rules and some extension of old ones. Is your software up to date?

Remember the forms will print for the previous tax year. Release 2021 will generate 2020 Tax forms.

Here are the 2021 tax updates in the Sage Depreciation January Release:

U.S. Companies only:

• The Section 179 expense deduction increased $10,000 to a maximum of $1,050,000 for tax years beginning in 2021. You can use the Tax Expense report to check how much Section 179 you have claimed across all assets in a tax year.
• The Section 179 expense deduction for Sports Utility Vehicles (SUVs) increased $300 to a maximum of $26,200 for tax years beginning in 2021.
• Automobiles (property type A) and Light Trucks and Vans (property type T) depreciation caps increased for vehicles placed-in-service during 2021 or later.
• IRS Form 4562–Depreciation and Amortization is updated for tax years beginning in 2020.
• First-year bonus rates (168 Allowance %) of 80%, 60%, and 40% were implemented for property placed in service in 2023, 2024, and 2025, respectively.

Tax Updates for the Reporting Tax Year 2020

Section 179 has been adjusted for inflation for the 2020 tax year. Auto and Truck limits have remained the same from 2019 to 2020.

Read More: What is Section 179 and How Does it Work?