Bonus Depreciation for 2026

100% for qualified property acquired after January 19, 2025. The One Big Beautiful Bill Act restored full expensing for that property and removed the phase-down, so the rate does not fall in later years. Property acquired on or before January 19, 2025 but placed in service in 2026 is still on the old schedule and gets 20%.

Yes, for property acquired after January 19, 2025. The law replaced the year-by-year percentages with a flat 100%, with no end date. Only property acquired before the cutoff keeps the old phase-down, which ends after 2026: such property placed in service in 2027 or later gets no bonus depreciation.

Mainly tangible property depreciated under MACRS with a shorter recovery period, such as machinery, equipment, vehicles, furniture and computers, plus off-the-shelf computer software and certain film, TV and live theatrical productions. Both new and certain used property qualify. Buildings themselves generally do not.

Yes. You can elect out for any class of property, which then applies to all property in that class placed in service that year. The election is made on a statement attached to a timely filed return, including extensions. Businesses that expect higher rates later, or that would otherwise waste a loss, sometimes prefer regular depreciation.

$2,560,000, reduced dollar for dollar once total section 179 property placed in service during the year exceeds $4,090,000. The section 179 cost of an SUV is capped at $32,000. Unlike bonus depreciation, the section 179 deduction cannot exceed your taxable income from the active conduct of a trade or business.

For most qualifying purchases both now give a full first-year write-off. Bonus depreciation applies automatically to every qualifying asset in a class unless you elect out and is not limited by business income. Section 179 lets you pick asset by asset and dollar amount, but is capped at $2,560,000 and by business income. Many businesses use section 179 first for selected assets and let bonus cover the rest.