Back to Top Depreciation. The ability to recover a portion of amounts spent on fixed assets through depreciation deductions over time is a major tax benefit, especially for capital-intensive businesses. Properly segregating fixed asset costs is essential, since the period over which an asset can be depreciated and the amount deductible in each year varies with the category to which the asset is assigned. The depreciation period for commercial buildings and their structural components is 39 years. A recent Tax Court decision involving a hospital has opened the door for taxpayers to segregate certain building-related costs and depreciate them more quickly than the building itself.
Timing also plays a critical role in depreciation planning.
Back to Top Section 179 deduction. You can make this election for most non-real estate assets. The deduction can't exceed taxable income from any of the taxpayer's active trades or businesses. Back to Top Business driving. While the standard mileage rate involves less record- keeping, it won't necessarily produce the largest tax deduction.