If your business bought a truck, a piece of equipment, or made a significant capital improvement in the last year, this might be the best tax news you’ve heard in a while: 100% bonus depreciation is back, and it’s permanent.
Under the One Big Beautiful Bill Act, businesses can now deduct the full cost of qualifying assets in the year they’re placed in service. No more phasing down. No more wondering whether Congress would extend it. It’s in the tax code for good.
The IRS issued interim guidance on the restored bonus depreciation rules in Notice 2026-11, which covers qualifying property, placed-in-service dates, and election procedures.
What Qualifies?
Bonus depreciation applies to most qualifying business property placed in service after January 19, 2025. That includes new and used equipment, machinery, furniture, certain vehicles, land improvements, and a range of other tangible assets.
There are some notable exceptions. HVAC systems and roofs on nonresidential buildings don’t qualify for bonus depreciation — though they may still be eligible for Section 179 expensing if the building has already been placed in service. It’s a nuance worth knowing.
Why This Matters for Your Industry
HVAC and plumbing contractors buying new service trucks, diagnostic equipment, or tools can write off the full cost immediately. Construction companies investing in excavators, lifts, or job site trailers get the same benefit. Dental and medical practices upgrading imaging equipment, chairs, or office technology can deduct it all in year one. Farm and ranch operations purchasing tractors, implements, or livestock handling equipment can accelerate their deductions dramatically.
DIY: The Capital Asset Audit
| ✅ DO THIS BEFORE YOUR NEXT TAX APPOINTMENT Create a simple asset inventory. For every major purchase your business made in the last 12 months, document: 1. What you bought (description of the asset) 2. Date placed in service (when you started using it in the business — not the purchase date) 3. Total cost (including delivery, installation, and sales tax if applicable) 4. How it’s used (100% business use? Mixed personal/business?) 5. Whether it’s recorded in your books as an asset (not just an expense) If you find purchases that were expensed directly to your P&L instead of being recorded as depreciable assets, flag them. Your CPA may be able to reclassify them and claim bonus depreciation or Section 179, potentially saving you thousands. Also review the prior 2-3 years. The OBBBA retroactively restored 100% bonus depreciation for property placed in service after January 19, 2025. If assets from 2025 were depreciated at the old phase-down rates, there may be an opportunity to amend. |
Bonus Depreciation vs. Section 179 — Know the Difference
Both allow immediate expensing, but they work differently. Section 179 has a per-year limit and is limited to your taxable income. Bonus depreciation has no cap and can create a net operating loss that carries forward. Most small businesses benefit from using a combination of both. Your CPA can advise on the optimal strategy, but only if your asset records are clean and complete.
The IRS publishes a helpful comparison in Publication 946 (How to Depreciate Property) which is the definitive reference for depreciation rules.
The Bottom Line
Permanent 100% bonus depreciation is a genuine gift to businesses that invest in their operations. But gifts that go unclaimed don’t help anyone.
At BKKPRS, we keep your asset records organized, your chart of accounts structured correctly, and your books in a state where deductions like this are captured automatically — not scrambled for at year-end. If you’re making capital investments, make sure your bookkeeping is set up to capture the full benefit.
