What 100% Bonus Depreciation Means for Your Business in 2025

If you've been thinking about buying new equipment, vehicles, or even certain types of software for your business—now might be one of the smartest times to do it.

Thanks to recent changes under the so-called One Big Beautiful Bill, 100% bonus depreciation is back in full effect for 2025. That means you may be able to write off the entire cost of qualifying purchases in the year you place them in service.

Here’s what that really means, how it can benefit your business, and what to watch out for.

What Is Bonus Depreciation?

Normally, when you buy business equipment, you have to spread out the tax write-off over several years. It’s called depreciation. But with bonus depreciation, you get to take that entire deduction upfront—in the same year you made the purchase.

This has been a powerful incentive in recent years, but it was scheduled to phase down until this new legislation brought it back to 100%.

What Qualifies for Bonus Depreciation?

Here’s the part you’ll want to pay attention to: not all business purchases qualify. But many do.

💼 Qualifying assets typically include:

• Equipment and machinery

• Computers and software

• Certain business-use vehicles

• Furniture

• Some building improvements (like HVAC or roofing in nonresidential property)

  
  

The asset must have a useful life of 20 years or less and must be placed in service (not just purchased) during the tax year you're claiming it.

Why This Matters

For business owners, 100% bonus depreciation can be a game-changer:

Lower your tax bill immediately – Reducing taxable income now can improve cash flow and liquidity.

Time purchases strategically – If you're considering a major investment, placing it in service this year means taking full advantage of the deduction.

Combine with financing – Here's the kicker: you don’t even have to pay for the full equipment out of pocket to get the full write-off. If you finance the equipment, you may still be eligible to deduct 100% of the purchase price this year—while paying it off over time.

That’s a win-win for cash flow and tax planning.

A Note About Section 179

Bonus depreciation is often confused with Section 179. Both let you write off equipment, but there are differences in how they apply and what limits exist.

We’ll cover Section 179 in a follow-up post, but for now, just know this:

• Bonus depreciation has no dollar limit, but Section 179 does.

• Bonus can apply to new and used equipment, just like Section 179 now does.

• If you qualify for both, you may be able to use them together.

  
  

Talk to Your Tax Pro First

As always, this blog is here to inform—not to give tax advice. Bonus depreciation is a powerful tool, but there are rules and nuances (especially if you’re a sole proprietor, LLC, or use cash basis accounting).

A qualified tax professional can help you decide:

• Whether you’re eligible

• Whether bonus depreciation or Section 179 is more beneficial for you

• How it plays into your broader financial strategy

  
  

Final Thoughts

If you're planning to invest in your business this year—especially with equipment or assets that qualify—it’s worth looking into 100% bonus depreciation. It might mean you get a significant tax deduction this year, even if you finance the equipment over time.

👉 Curious how your next equipment purchase could impact your taxes?Brilliance Funding can help you explore financing options that align with your tax strategy. Let’s talk about what makes the most sense for your business.

About the Author

   Jared Holmes is the founder of Brilliance Funding Partners, where he helps business owners navigate the commercial lending landscape with confidence. With 9 years of hands-on experience in SBA lending, equipment financing, and working capital solutions, Jared focuses on asking the right questions and delivering financing strategies that make sense for each business. Connect with Jared for a personalized conversation about your options.