Is 100 percent bonus depreciation really back for good?

Under current law, yes. The 100% bonus depreciation allowance has been restored for qualifying property acquired and placed in service after January 19, 2025. This time it is written as permanent rather than subject to the phase-down that reduced the original provision to 80%, then 60%, and so on.

What this means practically is that qualifying equipment, vehicles, and certain property components can be fully deducted in the year they are placed in service. A $200,000 piece of equipment purchased in 2025 can generate $200,000 in depreciation deductions that same year rather than spreading the deduction over the asset’s useful life. For businesses making capital purchases, this changes the after-tax math significantly.

The provision applies to new and used property as long as it is new to the taxpayer, meaning you did not own it before. Qualifying property generally includes equipment, machinery, vehicles meeting certain weight thresholds, certain land improvements, and qualified improvement property. For real estate investors, cost segregation studies become especially valuable again because bonus depreciation applies to the shorter-life components those studies identify in a building.

One detail worth noting is the look-back opportunity. Property placed in service after January 19, 2025 but before the law was enacted may qualify retroactively. Capturing this does not require amending prior returns. Instead, the IRS allows taxpayers to claim the benefit through an accounting method change filed with the current year’s return. If you placed qualifying property in service during that window and depreciated it under the old phase-down rules, you may be able to claim the additional deduction this year.

This restoration makes timing decisions around purchases, build-outs, and renovations more consequential. A year-end equipment purchase or a leasehold improvement project that closes before December 31 can generate meaningful first-year deductions that would not exist if the same purchase closed in January. Tax and accounting services built around year-round planning are designed to catch these opportunities while decisions can still be made.

Results vary widely based on the property type, the purchase price, and whether the owner has the income to absorb the deductions. Tax provisions change. Every rate, threshold, and allowance mentioned here reflects current law and should be verified at the time of your engagement. If you have qualifying property in service or a purchase decision ahead of you, we would be glad to walk through the numbers. Book a consultation and let us take a look at your situation.