100% Bonus Depreciation Returns in 2025 - Permanently

The newly enacted OBBBA permanently reinstates 100% bonus depreciation for 2025 and beyond. This lets businesses deduct the full cost of eligible new or used equipment in the same year it's placed in service, rather than depreciating it over multiple years.   

The result? Dramatically reducing your tax bill and improving cash flow.  

What Qualifies for 100% Bonus Depreciation? 

• Equipment and machinery used in manufacturing, construction, recycling, logistics, and more 
• Commercial-grade batteries and energy systems (e.g., solar storage, EV infrastructure)
• Water treatment and recycling systems: pumps, filtration systems, and industrial water solutions 
• Business software - off-the-shelf or custom-developed, placed in service for business use 
• Vehicles and trailers used for business purposes 

Important Considerations 

• Placed-in-Service Date: Must be placed in service after January 19, 2025
• Used Equipment: Eligible if not previously used by the purchaser or a related party
• State Tax Differences: Many states don't follow federal bonus depreciation rules. You may need to separate depreciation schedules, deducting the full amount federally, but depreciating over time on your state return.  

What If I Finance the Equipment? 

You can still claim 100% bonus depreciation when financing equipment - provided the financing structured qualifies as a taxable purchase, such as:

• An Equipment Finance Agreement (EFA)
• A $1 purchase option lease  

These ensure that you're treated as the owner for tax purposes, making the equipment fully deductible.

Why It Matters in 2025

• Boosts Cash Flow: Deduct the full cost upfront and reduce your tax bill immediately, freeing up working capital 
• Certainty in Planning: With permanent 100% bonus depreciation, you can invest in new equipment with confidence
• Increased Section 179 Limits: The 2025 Section 179 deduction limit to $2.5 million (up from $1.2 million in 2024), with a new phaseout threshold of $4 million

Ready to Invest?

Whether you're buying new or used equipment, 2025 is the perfect time to invest in your business. Financing options like EFAs and $1 buyout leases help you preserve cash flow while maximizing your tax benefits.