100% Bonus Depreciation Returns 2025: The Loophole That Lets You Write Off Everything

Breaking: 100% bonus depreciation is back for 2025. If you're buying equipment this year, you can write off the entire purchase price immediately not over 5 years, not over 7 years. The full amount. This year.

This changes everything for business owners planning major purchases. Here's what you need to know:

• What qualifies: Vehicles over 6,000 pounds, computers, software, machinery, equipment, furniture, and most tangible business property
• New or used: Both qualify (yes, used equipment counts)
• Business use: Must be used more than 50% for business
• Timing: Must be placed in service during 2025

The Numbers Don't Lie

Contractor buys $100,000 in equipment. Normal depreciation: maybe $14,000 in year one. With 100% bonus depreciation: $100,000 in year one. At a 24% tax rate, that's $24,000 in immediate savings instead of $3,360.

But here's the real kicker: if you have enough deductions, you can reduce your taxable income to zero. Some business owners are timing major purchases for December to maximize this in high income years.

One Important Detail

You can finance the purchase and still write off the full amount. The IRS doesn't care how you pay as long as you own it and use it for business, you get the full deduction.

The loophole starts phasing out in 2026, so 2025 is your window. Start planning now.

Sources: IRS Publication 946