How the OBBBA's Bonus Depreciation Changes Business

A major tax update was recently signed into law that could fundamentally affect your business finances. The One Big Beautiful Bill Act (OBBBA), passed on July 4, 2025, includes a key provision—permanent 100% bonus depreciation. This could be a game-changer for many enterprises eager to purchase new equipment, vehicles, or make property improvements. This blog post will guide you through the changes and the potential benefits for your business.

What's New with Bonus Depreciation?

• Businesses can now deduct 100% of the cost of qualifying assets placed in service starting January 20, 2025.
• Previously set to phase down, the bonus depreciation rule is now permanent.
• Qualifying assets include equipment, machinery with a useful life of 20 years or less, qualified improvement property, computer software, and certain business vehicles, noting caveats for weight and use.

Understanding the Impact

With this new law, businesses can deduct the full cost of eligible assets—like computers, furniture, or building improvements—in the year they’re placed in service. This approach drastically boosts available working capital by reducing taxes in the initial year.

Why This Matters

Accelerated deductions not only improve cash flow but also allow funds to be reinvested into different areas such as staffing, system upgrades, or even expansions. More than just a tax strategy, this law equips businesses with greater flexibility to time asset purchases according to their specific operational needs.

Considerations

While this federal provision holds across the board, not all states may conform. It's crucial to check your local tax rules. For instance, buying a fleet of vehicles or upgrading a software system could benefit significantly from these new rules, but it’s important to consult a tax professional to ensure alignment with state laws.

Taking Advantage of the Opportunity

This law offers a rare opportunity for upfront tax savings and strategic financial planning. Businesses with planned investments on the horizon could see substantial benefits in their financial health and growth trajectory.

Call to Action: Evaluate your upcoming purchases and reach out to a tax advisor to understand how you can make the most of the bonus depreciation and strengthen your financial stance.