What CPAs Should Know About the Return of 100% Bonus Depreciation in 2025
- Zachary Kamish
- Jul 29
- 3 min read
As of July 4, 2025, the “One Big Beautiful Bill Act” (OBBBA) restores and permanently reinstates 100% bonus depreciation for qualified property placed in service after January 19, 2025, so long as the binding acquisition contract was also signed on or after that date.
Previously, bonus depreciation was scheduled to phase out:
60% in 2024
40% in 2025
20% in 2026
0% by 2027
OBBBA eliminated the phase-out and makes the full expensing available indefinitely
.
📌 Why the Timing of Contract & Service Dates Matters
To qualify for this 100% deduction, both of these must happen on or after January 20, 2025:
The binding contract is signed
The asset is placed into service
For example:
A warehouse upgrade signed on Jan 15, 2025 qualifies for only 40% bonus depreciation.
If signed on Jan 22, 2025, the same improvements qualify for 100% deduction.
CPAs need to review and clarify both dates during planning.
✅ Which Assets Qualify?
Eligible property includes:
Tangible personal property with a MACRS life ≤ 20 years (e.g., furniture, machinery, computers)
Qualified Improvement Property (QIP) for non-residential interiors
Exterior site improvements like paving and lighting
Certain used property—if it wasn’t previously owned by a related party or used by the taxpayer.
New in OBBBA: Qualified Production Property (QPP)—special rules allow full expensing for buildings used in manufacturing or tangible goods production, provided construction starts after Jan 19, 2025 and they’re placed into service by Jan 2031.
💡 Maximizing the Opportunity – Strategic Planning Tips
Model bonus vs. phased depreciation to inform estimated tax payments and cash flow ⬆
Coordinate contract & asset timelines—work with attorneys, builders, and clients to align:
Contract date ≥ Jan 20, 2025
Asset placed in service ≥ Jan 20, 2025
Engage cost segregation specialists early—studies can help classify shorter-lived assets and QPP components for bonus depreciation. Real estate investors have seen millions in tax savings by identifying 5-, 7-, or 15-year components that qualify.
Consider mixing Section 179 and bonus depreciation—Section 179 now has a $2.5M 2025 cap (phase-out after $4M). Section 179 is applied first; bonus depreciation applies to the remaining basis. This can be used strategically to manage income thresholds and deduction timing.
Document business-use for listed property–especially for aircraft, vehicles, and heavy equipment, which must meet Qualified Business Use thresholds and may be subject to recapture if use drops below 50% later.
📈 How This Changes Our Advisory Role
At Kamish & Associates, this isn’t just a tweak in the tax code—it’s a powerful tool for strategic planning. Whether our clients are business owners, real estate investors, or professionals managing capital-heavy expenditures, the reinstated bonus depreciation:
Accelerates tax savings
Improves near-term cash flow
Enhances reinvestment opportunities
We help by:
Reviewing asset purchase and service dates
Running “what-if” tax scenarios
Coordinating cost segregation and election timing
Supporting proper documentation and compliance
🧭 What CPAs Should Do Now
Audit planned acquisitions & contracts for January 2025 alignment
Work with clients to adjust purchase or activation timing, if needed
Review client capital spending plans to evaluate whether Section 179 or bonus depreciation is more efficient
Coordinate cost segregation studies and engineering support for real estate and production-related projects
Update tax projections and discuss cash flow implications with clients
📝 Final Word
The permanent reinstatement of 100% bonus depreciation under OBBBA represents a significant shift in business tax planning. But success hinges on timing, documentation, and strategy.
If you’d like Kamish & Associates to help you or your clients navigate the new rules or model eligible deductions, we're available to support you—your planning window is open now.
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