Maximize Your Tax Savings with OBBBA's 100% Bonus Depreciation

Jordan Sibley

A major tax update, the One Big Beautiful Bill Act (OBBBA), was signed into law on July 4, 2025, bringing a significant impact on business finances. At the heart of this update is the introduction of permanent 100% bonus depreciation, a game-changer for businesses planning new equipment purchases, vehicle acquisitions, or property improvements.

What's Changed?

  • Businesses can now fully deduct the cost of qualifying assets placed in service starting January 20, 2025.
  • This new rule makes bonus depreciation permanent, reversing the previous phase-down that was set at 40% for 2025.
  • Qualifying assets include equipment, machinery with a life of 20 years or less, qualified improvement property, computer software, and certain business vehicles.

Benefits of the New Depreciation Rule

  • Deduct the full cost of eligible assets—like computers, furniture, or building improvements—in the year they’re placed in service.
  • Taking full depreciation upfront reduces taxes for the purchase year, increasing working capital.
  • Accelerated deductions enhance cash flow, providing funds for reinvestment in staffing, system updates, or expansion.
  • Businesses gain flexibility to time purchases based on operational needs and tax strategy.

Consider Potential Use Cases

Imagine buying a fleet of vehicles or upgrading software systems and enjoying immediate tax savings. However, note that not all states may conform to this federal provision, so check your local tax rules.

Consult a Professional

Before jumping in, it's advisable to consult with a tax advisor to fully understand how bonus depreciation can benefit your specific situation.

This new law presents a rare opportunity for upfront tax savings and strategic financial planning. It’s an excellent move for business growth, especially if you were already considering asset acquisitions. Evaluate your upcoming purchases and reach out to a tax advisor to explore the possibilities under this updated bonus depreciation rule.