December 05, 2025 | Posted in:

Bonus Depreciation Is Back with OBBBA: What Qualifies for 100% Write-Off?

The One Big Beautiful Bill Act (OBBBA) revived and expanded one of the most powerful business tax incentives of the past decade: 100% bonus depreciation. While bonus depreciation had been phasing down under prior law, OBBBA brings back a full write-off for qualifying purchases, giving businesses a major opportunity to reduce taxable income and improve cash flow beginning in 2025.

Here’s what business owners, CFOs, and entrepreneurs need to know.

What is Bonus Depreciation?

Bonus depreciation allows businesses to immediately expense 100% of the cost of certain qualified property in the year it is placed in service, instead of depreciating it over many years. This is different from Section 179 expensing, which has purchase limits and taxable income restrictions.

Under OBBBA:

100% bonus depreciation applies from 2025–2027
The percentage gradually phases out from 2028–2030
Many types of equipment, vehicles, and technology now qualify

What Property Qualifies for 100% Bonus Depreciation?

Bonus depreciation rules are complex, but OBBBA expands eligibility. Qualifying purchases generally include:

Machinery & equipment

Manufacturing equipment
Construction equipment
Heavy machinery

Technology & software

Computers & servers
POS systems
Off-the-shelf software
Cloud computing implementations (if capitalized under the new rules)

Furniture & fixtures

Office furniture
Retail shelving
Restaurant equipment

Certain vehicles

Heavy SUVs and trucks over 6,000 lbs
Commercial vehicles
Vans used for business purposes
(Passenger vehicles under 6,000 lbs still have specific depreciation caps — ask your CPA before purchasing.)

Qualified improvement property (QIP)

Interior improvements to commercial buildings now clearly qualify again, with technical corrections under OBBBA.

Key Depreciation Rules to Know Under the New Tax Law

1. Must Be “New to the Taxpayer”

Property can be new OR used — as long as it’s the first time your business is using it.

2. Must Be Placed in Service in 2025–2027 for 100% Write-Off

Installation timing matters. Delivery delays could reduce your deduction.

3. Bonus Depreciation Phases Down Starting in 2028

80% in 2028
60% in 2029
40% in 2030

4. Section 179 Still Exists — and Can Be Combined

OBBBA did not eliminate Section 179. You can combine both strategies for maximum tax savings.

What Does Not Qualify for 100% Bonus Depreciation?

Land or buildings
Used property acquired from a related party
Property used outside the U.S.
Assets used less than 50% for business
Inventory

Recordkeeping

Thorough documentation is important. Even though bonus depreciation is generous, businesses must maintain:

Purchase invoices
Proof of payment
Service/installation dates
Allocation for any personal use (vehicles)

Tax Planning with your Tax Advisor

The new tax law’s bonus depreciation revival is an impactful cash-flow tool for small and mid-sized businesses. If your business is considering upgrades, replacements, or expansion, 2025–2027 may be the most tax-efficient window to do so.

Alloy Silverstein can help you structure purchases, timing, financing, and depreciation strategies to maximize your tax savings. If you’re planning to invest in equipment or improvements this year, schedule a tax planning consultation with our team.

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