Bonus Depreciation

Now may be the time to buy! 100% bonus depreciation is restored!

The ability to fully expense fixed asset purchases acquired and in use after January 19, 2025 is returning. And now qualified production facilities get in on the action too!

Purchases that normally have to be depreciated over time now qualify for 100% Bonus Depreciation - these purchases can be fully expensed in the year they are purchased. This is an immediate reduction in taxable income. The return of bonus depreciation is applicable to Corporations, Partnerships, Sole Proprietorships, Schedule C’s and Schedules E’s. Bonus depreciation applies to tangible fixed assets that have a useful life less than 20 years including:

· Furniture & Fixtures: office desks, cabinets, countertops, etc.

· Equipment: copy machines, machinery, rental property appliances, etc.

· Company vehicles

With the signing of OBBBA, qualified production facilities also get to take advantage of bonus depreciation. What are qualified production facilities?

Qualified production facilities are domestic 39-year property where construction begins after January 19, 2025 and before January 1, 2029 and are placed in service by January 1, 2031. The primary function of the property MUST be an integral part of the manufacturing, production or refining of a product.