100% Bonus Depreciation Is Back: What Businesses Can Write Off in 2025

December 09, 2025

As a tax preparer, you already know that depreciation is an important cashflow and budget management tool for your business clients. This year, depreciation options got a big boost when 100% bonus depreciation was permanently restored by the One Big Beautiful Bill (OBBB). Previous to the OBBB, bonus depreciation had been phasing out under the Tax Cuts and Jobs Act (TCJA).

This change, combined with expanded Section 179 limits, creates opportunities for businesses to write off major purchases—including vehicles over 6,000 pounds—in the year they’re placed in service.

Like many provisions enacted by the OBBB, certain conditions of the updated rules are effective during the year, not at the beginning of a year, so pay careful attention to these dates.

Here’s what tax preparers need to know about the latest bonus depreciation rules to help clients maximize deductions and minimize taxable income in 2025.

What Property Qualifies?

For tax year 2025, 100% depreciation can be taken for qualifying property acquired and placed in service after January 19, 2025. Qualifying property includes:

Equipment and machinery
Computer hardware and software
Furniture and fixtures
Qualified Improvement Property (QIP) for nonresidential buildings
Certain vehicles over 6,000 pounds GVWR

Section 179 vs Bonus Depreciation: What’s the Difference?

While both Section 179 and bonus depreciation allow for accelerated expensing, there are differences:

Feature	Section 179	Bonus Depreciation
Deduction Limit (2025)	$2.5 million	No limit
Income Limitation	Cannot exceed taxable income	Can create a loss
Asset Selection	Taxpayer can choose which assets to expense	Applied to all qualifying assets unless opted out
Used Property	Eligible	Eligible if “new to the taxpayer”

Strategy Tip: Use Section 179 first, then apply bonus depreciation to remaining eligible costs. This combination is especially useful for businesses with large capital expenditures.

Vehicles Over 6,000 Pounds: An Attractive Deduction

One of the most appealing applications of these deductions is for heavy SUVs, trucks, and vans. Vehicles with a Gross Vehicle Weight Rating (GVWR) over 6,000 lbs are not subject to the luxury auto depreciation caps under IRS §280F.

2025 Deduction Options:

Section 179: Up to $31,300 for heavy SUVs (6,001–14,000 lbs)
Bonus Depreciation: 100% write-off for the remaining cost (no cap)

Example:

A business purchases a Chevy Suburban (GVWR: 7,300 lbs) for $75,000 in March 2025:

Section 179 deduction	$31,300
Bonus depreciation	$43,700
Total first-year deduction	$75,000

Important: The vehicle must be used more than 50% for business, and placed in service after January 19, 2025, to qualify for 100% bonus depreciation.

Planning Tips for Tax Preparers

Verify Acquisition and In-Service Dates: Assets acquired before January 20, 2025, but placed in service after, may still fall under the old 40% rule.
Use Cost Segregation for Real Estate: Reclassify building components into shorter-life assets to qualify for bonus depreciation.
Watch for State Nonconformity: Not all states follow federal bonus depreciation rules—check local tax laws.
Document Business Use: Especially for vehicles, maintain mileage logs and usage records to support deductions.
Coordinate with QBI Deduction: The OBBBA also made the 20% Qualified Business Income deduction permanent, so plan accordingly.

The return of 100% bonus depreciation in 2025 is a game-changer for businesses and tax professionals. When combined with the expanded Section 179 deduction, it offers unprecedented flexibility and savings potential. Whether your clients are investing in equipment, upgrading their office, or purchasing commercial vehicles, make sure to advise them on the enhanced depreciation options for tax year 2025.