How to Claim 100% Bonus Depreciation in 2026 Without Getting the Timing Wrong

"Is 100% bonus depreciation really back?"

Yes. The 2025 tax law stopped the phase-down that would have cut it to 20% for 2026, and brought back 100% for most qualifying property.

That's why everyone is asking. Buy $100,000 of qualifying equipment, have it in use by December 31, and you can generally deduct all $100,000 this year instead of spreading it over several years. At a 24% tax rate, that's roughly $24,000 in federal tax savings. At 37%, roughly $37,000.

But the better question for a 2026 purchase is this: does yours actually qualify?

The Date Most People Miss

Most owners assume that if the equipment is placed in service in 2026, meaning it's delivered, set up, and ready to use, it qualifies.

Placed in service in 2026 does not automatically mean 100% bonus depreciation applies.

The date you acquired it matters too. The 100% rate applies to property acquired after January 19, 2025. If the purchase was locked in before that date, it can fall under the old, lower phase-down rate, even if the equipment showed up and went to work this year.

So if a deal was locked in before January 20, 2025 and finished in 2026, check the dates before you count on the full deduction. Keep the purchase agreement, invoices, and delivery or installation records. Those are what prove both dates.

If you're buying now, the purchase date isn't the issue. What matters is that the equipment is delivered, set up, and ready to use by December 31.

What Qualifies

Most business property other than land and buildings, including:

• Machinery and equipment
• Computers, office furniture, and certain software
• Certain vehicles
• Many interior improvements to a commercial building (not additions, elevators, or structural work)

Used equipment can qualify too, as long as it's new to you and you didn't buy it from a close family member or a business you control.

Land doesn't qualify, and neither do most buildings. But if you own commercial or rental real estate, a cost segregation study can separate out parts of the property that depreciate over 5, 7, or 15 years, and those parts can qualify.

Bonus Depreciation or Section 179?

Section 179 is the other way to write off equipment in year one. The practical differences:

• Section 179 generally can't push your business into a loss. Bonus depreciation can, which matters if you want the biggest deduction possible this year.
• Section 179 lets you pick which assets to expense. Bonus applies automatically to all assets of the same type unless you opt out.
• You can use both.

When the Full Deduction Isn't the Best Move

Bonus depreciation doesn't make the tax go away. It moves the deduction into this year.

If you expect a bigger income year ahead, the deduction may be worth more later. If you sell the equipment down the road, part of what you deducted can come back as ordinary income. And many states don't follow the federal rule, so your state return can look very different.

Before December 31

• Make sure anything you're counting on for 2026 is delivered and ready to use by December 31. Ordered isn't enough.
• For any deal locked in before January 20, 2025, confirm the acquisition date.
• Decide between bonus depreciation, Section 179, or both, based on this year's income.
• Check how your state treats it.

If you're planning an equipment purchase, major improvements, or a cost segregation study, map it out before year-end, not at tax time.