Why Bonus Depreciation May Be the Biggest Win for Business Owners in the New Tax Law

On July 4, 2025, the Opportunity for a Better, Balanced Budget Act (OBBBA) was signed into law, bringing sweeping changes to the tax landscape. While several provisions are noteworthy, one of the most impactful for business owners is the permanent extension and expansion of 100% bonus depreciation.

What Is Bonus Depreciation?

Bonus depreciation allows businesses to immediately deduct 100% of the cost of eligible assets—such as machinery, equipment, technology, and certain real property—rather than depreciating those assets over multiple years. Previously set to phase out under the Tax Cuts and Jobs Act, this deduction is now permanent under the new law.

Why It Matters to Business Owners   

Immediate Tax Savings

The ability to deduct the full cost of qualifying purchases in the year the asset is placed in service can result in significant tax savings. This improves short-term cash flow and frees up capital for reinvestment or growth.

Encourages Long-Term Investment

With bonus depreciation now permanent, business owners have clarity and confidence when planning capital expenditures. Whether you’re updating technology, expanding facilities, or purchasing equipment, the tax benefit is locked in—allowing for smarter investment planning.

Expanded to Include “Qualified Production Property”

A key enhancement under OBBBA is the expansion of bonus depreciation to cover certain nonresidential real property, such as factories and production facilities. This is a game-changer for manufacturing and industrial businesses that are investing heavily in physical infrastructure.

Strategic Tax Planning Made Easier

Business owners no longer have to time purchases to maximize a temporary deduction. The permanent nature of this provision means you can make investment decisions based on business needs—not expiration dates.

Is Your Business Taking Advantage?

If your business is considering equipment upgrades, facility improvements, or major capital purchases, this change could significantly reduce your tax liability. It’s also an opportunity to review your current depreciation strategy and ensure you’re maximizing available deductions.

At DWD CPAs & Advisors, we’re here to help you assess the impact of this and other provisions under the new tax law. We’ll work with you to identify planning opportunities and ensure your business is in the best possible position moving forward.