<strong>How the OBBBA's Bonus Depreciation Can Boost Your Business</strong>

A New Tax Law That Could Transform Your Financial Planning

On July 4, 2025, a major piece of legislation, the One Big Beautiful Bill Act (OBBBA), was signed into law, introducing a significant update in tax provisions that could substantially impact business finances. This update permanently establishes the 100% bonus depreciation rule, presenting a game-changing opportunity for businesses planning to purchase new equipment, vehicles, or make improvements. This blog will guide you through these changes and how your business can gain from them.

What is Bonus Depreciation?

The OBBBA allows businesses to deduct 100% of the cost of qualifying assets placed in service starting January 20, 2025. Previously, the depreciation schedule was reducing to 40% by 2025, but now it's permanent, providing long-term consistency for financial planning.

Qualifying Assets

Bonus depreciation applies to a wide array of business assets, including:

• Equipment and machinery with a useful life of 20 years or less
• Qualified improvement property
• Computer software
• Certain business vehicles (subject to weight and use criteria)

The Financial Benefits of Bonus Depreciation

• The ability to deduct the full cost of eligible assets, like computers, furniture, or building improvements, in the year they’re put into service.
• This upfront deduction significantly lowers taxes in the purchase year, increasing available working capital.
• Improved cash flow enables reinvestment opportunities in areas like staffing, system upgrades, and business expansion.
• Businesses can strategically time purchases according to their operational needs and tax strategy, enhancing flexibility.

However, it's crucial to note that not all states may align with this federal provision, so checking your local tax rules is essential.

Real-world Applications

This new opportunity can translate into valuable real-world benefits. For instance, if you're planning to purchase a fleet of vehicles or upgrading your software systems, the 100% deduction could significantly alleviate financial pressure and free up funds for other priorities.

Consultation with Tax Professionals

Before making any financial decisions, it’s always wise to consult with a tax professional who can provide tailored advice specific to your business situation. They can help you understand how to maximize these benefits while complying with both federal and state regulations.

This new law offers a rare chance for substantial upfront tax savings and strategic financial planning. It can be a powerful catalyst for business growth, particularly if you already have planned investments. Take this opportunity to evaluate your upcoming purchases and consult with a tax advisor on how this bonus depreciation can uniquely benefit your business.