Like Section 179, Bonus Depreciation also helps you write off more of the cost of assets then just regular depreciation would. But there are some differences:
- Section 179 lets you expense up to $1.22M of qualifying property if you have profit and taxable income to support it.
- Bonus Depreciation lets you take a write off on the asset regardless of profit or income. You can even use it to create or increase a loss.
Here’s when Bonus Depreciation might be the smarter move:
- Your business has a net loss — Bonus still works
- You bought used assets — Bonus allows it (if new to you)
- You hit your §179 cap — Bonus picks up the rest
- Less stringent business use requirements — Property can still qualify, even if used less then 50% for business
Planning tip: Under current federal tax law, bonus depreciation is set at 40% for the 2025 tax year. Under the version of the “One Big Beautiful Bill Act” that passed the House in May 2025, Bonus deprecation would be set to 100% for any asset purchased after January 19, 2025. The bill is not final yet, so make sure you’re working with your tax advisor to stay up to date on this & to make strategic buying decisions this year.
