Is the 100% bonus depreciation permanent under the OBBBA?
Yes. The One Big Beautiful Bill Act (OBBBA), signed into law in 2025, permanently restored 100% bonus depreciation for qualified property acquired and placed in service after January 19, 2025. This reversed the phase-down that had been in effect: 80% for 2023, 60% for 2024, 40% for January 1–19, 2025, and what would have been […]
Can bonus depreciation create a net operating loss (NOL)?
Yes. Unlike Section 179 expensing, bonus depreciation can create or increase a net operating loss. Under current law (post-TCJA), NOLs can be carried forward indefinitely but can only offset up to 80% of taxable income in future years. This means if your bonus depreciation deduction exceeds your taxable income, the excess creates an NOL that […]
Can I use Section 179 instead of bonus depreciation?
Yes, Section 179 is an alternative that also allows immediate expensing of business assets. However, there are key differences: Section 179 has an annual dollar limit ($1,250,000 for 2025), a phase-out threshold when total asset purchases exceed $3,130,000, and it cannot create or increase a net operating loss. Bonus depreciation under Section 168(k) has no […]