OBBBA Brings Back 100% Bonus Depreciation for Businesses 

If you’re planning to invest in equipment, furniture, computers, or other business property this year, there’s exciting news. The One Big Beautiful Bill Act (OBBBA) has reintroduced and made permanent 100% bonus depreciation, creating powerful new tax-saving opportunities for businesses of all sizes.

What Is Bonus Depreciation?

Bonus depreciation allows businesses to deduct the full cost of qualifying property in the same year it’s placed in service, rather than spreading the expense over several years. This includes items such as:

• Machinery and equipment
  
  

• Office furniture
  
  

• Computers and software
  
  

• Land improvements like landscaping
  
  

Previously, bonus depreciation had been scheduled to phase down—dropping to 60% in 2024 and 40% for property placed in service before January 20, 2025. But with OBBBA, 100% bonus depreciation is now permanent.

That means if you purchase qualifying property and use it for business, you can deduct the entire cost upfront—even if it results in a loss. Any unused deductions can be carried forward to future years.

The only notable exception is passenger automobiles, which remain subject to an annual cap of $8,000.

Section 179 Expensing Still Exists—but with Limits

Alongside bonus depreciation, Section 179 expensing remains available. The OBBBA increased the Section 179 limit to $2.5 million in 2025, with phase-outs starting at $4 million.

While Section 179 gives businesses more flexibility to choose which assets to expense, it comes with restrictions:

• Property must be used more than 50% for business
  
  

• Deductions cannot create a business loss
  
  

• Annual caps apply
  
  

Because bonus depreciation now allows full, unlimited write-offs, most businesses will find Section 179 less essential—though still useful for targeted planning.

Big Win for Manufacturers: 100% Deduction for Production Property

In addition to personal property, OBBBA introduces a new deduction for production-related real estate. Traditionally, factories and other manufacturing buildings were depreciated over 39 years.

Now, businesses can deduct 100% of the cost in a single year if the property is:

• Built between January 20, 2025 – December 31, 2028
  
  

• Placed in service by January 1, 2031
  
  

Some existing properties may also qualify, provided they were not in service as production property during January 1, 2021 – May 12, 2025.

This is a game-changer for manufacturers, as it allows immediate tax benefits for large-scale investments in facilities.

Key Takeaways

• 100% bonus depreciation is now permanent for qualifying personal property.
  
  

• Section 179 expensing is still available, but with caps and limitations.
  
  

• Manufacturers gain a special one-time opportunity to deduct production facilities in full.
  
  

If you’re considering major business investments, now is the time to take advantage of these changes. Strategic planning could significantly reduce your tax liability and improve your cash flow.