Acme Inc., an S-Corp is one of several passthrough businesses owned by Jane Jetson. She estimates that Acmes taxable income before any depreciation or section 179 deductions will be $80,000 in 2020. Assume that she is considering having Acme purchase a piece of equipment before year end in 2020 that will cost $100,000. There were no other equipment purchases in 2020 for any of Janes businesses. The partner for the accounting firm that you work for suggested to Jane that she utilize bonus depreciation, rather than taking a $100,000 Section 179 deduction on this asset. What benefit is there to Jane Jetson in taking bonus depreciation over Section 179 on this asset?

Phaseouts information

ITEM 2019 2020

Child Tax Credit Phase out begins Single $200,000 Single $200,000

MFJ $400,000 MFJ $400,000

Student Loan Interest Single $70K to $80K Single $70K to $80K

MFJ $140K to $170K MFJ $140K to $170K

American Opportunity Credit Single $80K to $90K Single $80K to $90K

MFJ $160K to $180K MFJ $160K to $180K

Lifetime Learning Credit Single $58K to $68K Single $58k to $68K

MFJ $116K to $136K MFJ $116K to $136K

Child and Dependent care Credit The computation for this credit will not be tested.