Understanding Bonus Depreciation: Past, Present, and Future

Bonus depreciation has long been a powerful tax incentive for U.S. businesses, allowing for accelerated deductions on qualifying capital expenditures. Here's a quick snapshot of its journey:

✅ History: First introduced in the early 2000s, bonus depreciation gained significant traction under the Tax Cuts and Jobs Act (TCJA) of 2017, which allowed for 100% immediate expensing of qualified property through 2022.

📉 Currently: That generous 100% rate began phasing down in 2023— dropping to 80%, and set to decrease by 20% each year until it disappears entirely in 2027 unless Congress acts.

📜 Proposed Changes: A bipartisan bill is now making its way through Congress that aims to restore 100% bonus depreciation retroactively for 2023 and extend it through 2025. While not yet law, this could significantly impact planning decisions for businesses investing in capital assets.

If your business operates in the U.S. or cross-border and you'd like clarity on how these changes could impact your tax position, I'm here to help.

Let’s talk about optimizing your U.S. corporate tax strategy in light of evolving depreciation rules.

📩 Feel free to reach out!