100% Bonus Depreciation - 5 Things You Should Know

The One Big Beautiful Bill Act (the “Bill”) signed into law on July 4, 2025, has dramatically reshaped the landscape for capital investment and tax planning. One of its most impactful provisions? The permanent reinstatement of 100% bonus depreciation.

This change is a game-changer for businesses, allowing for immediate expensing of qualifying assets, potentially improving cash flow.

We have identified the five key things you need to know about this powerful provision:

1. 100% Bonus Depreciation Is Now Permanent

Businesses can now fully deduct the cost of qualifying property acquired and placed in service after January 19, 2025.

Instead of depreciating assets over several years, companies can fully deduct them in the year of purchase—freeing up capital and reducing current-year tax liabilities.

2. What Property Qualifies?

Certain tangible property acquired and placed in service after January 19, 2025, including:

• Tangible Property with a recovery period of 20 years or less (e.g., machinery, equipment, computers, vehicles).

  
  

• Computer Software and other eligible assets that are not amortizable as an intangible asset.

  
  

• Qualified improvement property (QIP) for improvements made to the interior of nonresidential real property, placed in service after the building’s initial use.

  
  

• Qualified Production Property for certain domestic manufacturing or production facilities and placed in service in the U.S. before January 31, 2031.

  
  

Both new and most used property can qualify, provided the taxpayer did not previously use the property and it was not acquired from a related party or in a tax-free transaction.

3. Which industries are likely to benefit the most?

Industries that are capital-intensive or frequently invest in depreciable property stand to gain the most. These include:

• Industries with Manufacturing and Domestic Production

• Real Estate and Construction

• Transportation and Logistics 

• Oil, Gas, and Energy

• Retail, Hospitality, and Restaurants

  
  

These sectors may realize significant tax and cash flow advantages from the ability to immediately expense capital investments under the new law.

Furthermore, businesses planning to make significant renovations to the interior of commercial buildings (e.g. office buildings, office space, facilities, leasehold improvements, etc.) may benefit from this incentive as well.

4. Business Tax Planning Is Critical

Bonus depreciation is generally mandatory unless a taxpayer elects out by asset class (e.g., not on an asset-by-asset basis). That’s why it’s critical to:

• Align capital investment plans with tax strategy

• Evaluate short- and long-term business goals

• Consider the impact on current and future tax attributes

  
  

Proper planning ensures you are optimizing benefits while staying compliant.

It is important to evaluate your business strategy, short-term and long-term capital investment plans, and the current tax attributes of your business to assess the costs vs benefits of this new law, and how it may impact your business and decision-making.  

5. How We Can Help

The new bonus depreciation rules offer powerful incentives—but they also come with complexity. We help businesses:

• Review asset depreciation eligibility

• Identify opportunities to optimize tax planning strategies

• Navigate and comply with tax compliance and reporting requirements

  
  

Let’s work together to ensure your capital investments are aligned with your tax growth strategy, and that your business tax compliance requirements are met.

For more information, contact us. 

Disclaimer

The contents of this insight are intended for general information only. illumina CPA Group, Inc. is not, by means of this communication, rendering professional advice or services. Before making any decisions or taking any action that may affect your finances or your business, you should consult a qualified professional adviser.

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