The One Big Beautiful Bill Act, passed by Congress on July 4, 2025, is a sweeping overhaul of the U.S. tax code.
It includes well-publicized tax credits and deductions for seniors as well as for high-income households.
But other groups — including business owners and real estate developers — will enjoy tax perks too (1).
That’s because the law makes permanent a tax incentive introduced under the 2017 Tax Cuts and Jobs Act during President Donald Trump’s first term (2).
Specifically, the 100% bonus depreciation provision allows business owners to calculate future depreciation and deduct it from their taxes in the current tax year.
For some, this change could mean huge savings — upwards of seven figures. Here’s a closer look at how it works and whether you could benefit.
Businesses pay corporate taxes on net profit (revenue minus costs). But when it comes to taxes, not all costs are equal.
For tax purposes, capital costs (for example, new equipment, furniture, vehicles and property) are treated differently than operational costs.
Business owners can write off a certain amount of depreciation for these items in their taxes. Traditionally, they would do so year by year as the items depreciated.
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But thanks to the 100% bonus depreciation rule introduced in the Tax Cuts and Jobs Act and made permanent in Trump’s One Big Beautiful Bill, business owners can accelerate the tax deductions for depreciation by carrying estimated depreciation forward to the current tax year.
The thinking behind the 100% bonus depreciation was threefold:
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Spur domestic investment.
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Improve businesses’ cash flow.
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Reduce businesses’ taxes quickly.
Depreciation schedules specify how the depreciation of different assets can be deducted over time.
For example, if you own a pizza restaurant and purchase a new pizza oven, traditionally you could write off a portion of the oven’s depreciation every year to offset some taxes.
Now, thanks to the 100% bonus depreciation rule, the pizza oven can be fully depreciated in the first year, significantly reducing the restaurateur’s taxable income and total tax bill.
The original rule was set to expire in 2027, but now that it’s permanent, business owners have more incentive to invest in equipment and property — and their tax bills may be about to shrink.
The primary beneficiaries of this new rule are business owners looking to make capital investments. However, that doesn’t mean all business investment qualifies for a swift write-off.
According to the firms Moss Adams x Baker Tilly and Anderson Business Advisors, business items that qualify for the bonus depreciation include (3)(4):
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15-year land improvements: hardscaping, landscaping and lighting, for example (but not the land itself)
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Office furniture and interior improvements (but not the office building itself)
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Off-the-shelf computers and office software (but not inventory)
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Vehicles over 6,000 lb. used for business more than 50% of the time. The bonus depreciation is based on the business-use percentage, so if you use these vehicles for work only 75% of the time you can only depreciate up to that limit.
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Certain production buildings
Property that is used for business only 50% of the time or less or is subject to the Alternative Depreciation System (ADS) doesn’t qualify for the bonus depreciation.
Real estate investors can also apply the bonus depreciation in several ways. Certain portions of the purchase price of a new rental property could qualify, along with any structures added to existing properties, such as fences, lights or walls.
Altogether, the new write-off is attractive but also highly complicated.
It’s important to pay close attention to eligibility rules along with deadlines, overlapping deductions, state and local taxes and classification rules.
If you’re a mid-sized business owner with considerable capital expenses every year, these new rules could help you save six- or even seven-figures over time.
But even small-scale property investors or mom-and-pop businesses could find some savings in this new rule.
If you’re a business owner looking to make a big investment or a landlord with multiple rental properties, reach out to an experienced accountant or tax lawyer to understand how these rules might affect you.
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Congress.gov (1); Bloomberg (2); Moss Adams x Bakery Tilly (3); Anderson Business Advisors (4)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
