Bonus Depreciation: What Equipment Buyers Should Know
Bonus depreciation can let you write off a large percentage of equipment cost in year one, on top of or instead of Section 179.
Bonus depreciation is a tax provision that lets businesses immediately deduct a large percentage of the cost of eligible equipment in the first year, rather than spreading it over the asset’s life.
How it differs from Section 179
Section 179 has annual dollar limits and phase-outs; bonus depreciation generally does not have the same spending cap, making it useful for larger purchases. Many businesses use both together.
Why timing matters
Because these deductions apply in the year the equipment is placed in service, acquiring — and installing — before year-end can meaningfully change your tax bill.
Bonus depreciation rules and percentages change over time. Confirm the current-year rules with your CPA.
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