One Big Beautiful Bill Act: 100% Write-Offs for Business Equipment

At a Glance:

• 100% bonus depreciation returns.

• No limits on deductions for most qualifying business property.

• Manufacturers get a new 100% write-off for certain production facilities.

If you plan to buy equipment, furniture, computers, or other personal property for your business, the One Big Beautiful Bill Act (OBBBA) delivers great news. You can now deduct the full cost of such property in a single year—without limit.

For manufacturers, the OBBBA goes even further by creating a new 100 percent deduction for factories and other production-related real estate.

⚡ 100 Percent Bonus Depreciation Returns

Bonus depreciation lets you deduct a property’s cost in the year you place it in service, instead of spreading the deduction over several years. You can apply it to most personal business property, off-the-shelf software, and land improvements such as landscaping.

The OBBBA increases bonus depreciation to 100 percent for property acquired and placed in service on or after January 20, 2025. Previously, bonus depreciation had dropped to 60 percent in 2024 and fell to 40 percent from January 1 through January 19. The new law makes the 100 percent deduction permanent.

This change makes bonus depreciation the primary method for deducting personal property. You may deduct the entire cost of a qualifying property in one year if you use it exclusively for business. The only exception is listed property, primarily passenger automobiles, which remain subject to an annual cap of $8,000.

• There is no overall limit on bonus depreciation deductions, even if they create a loss.

• You can carry unused deductions forward to future years.

• If you prefer not to use bonus depreciation, you must opt out for the entire class of assets.

🧾 Enhanced Section 179 Deduction

Section 179 expensing overlaps with bonus depreciation but comes with annual limits. The OBBBA raised the Section 179 limit to $2.5 million for 2025, with a phase-out beginning at $4 million of property placed in service.

Because of the new, permanent 100 percent bonus depreciation, most businesses will rely less on Section 179. Unlike bonus depreciation, Section 179

• requires business use of at least 51 percent,

• cannot create a loss, and

• carries annual caps.

However, Section 179 allows you to pick and choose specific assets to expense, which can be beneficial for planning purposes.

🏭 New Deduction for Qualified Production Property

The OBBBA also created a temporary 100 percent deduction for real property used in manufacturing tangible goods, such as factories, refining halls, and assembly lines.

Typically, businesses depreciate such property over a period of 39 years.

Now, you may deduct the entire cost in one year if you build the property between January 20, 2025, and December 31, 2028, and place it in service by January 1, 2031. Specific existing property may also qualify if it was not in service as qualified production property between January 1, 2021, and May 12, 2025.

Local Note: This enhanced deduction may be especially beneficial for manufacturers in Fullerton, Anaheim, Orange, and surrounding Orange County cities that are planning facility upgrades or new construction.

Guide for small business owners in Fullerton & Orange County, CA

✅ Quick Snapshot

• You can now deduct 100% of most business equipment in the year you buy it.

• There is no overall dollar limit on bonus depreciation deductions.

• Section 179 is still useful for picking specific assets to expense.

• Manufacturers get a new, temporary 100% deduction for qualifying factory and production buildings.

If you’re planning to buy equipment, furniture, computers, or other personal property for your business, the One Big Beautiful Bill Act (OBBBA) brings very generous tax rules.

In many cases, you can now deduct the full cost in one year—instead of writing it off slowly over time. For manufacturers and producers, OBBBA goes even further and adds a new 100% deduction for certain factory and production-related real estate.

💡 100% Bonus Depreciation Is Back (and Permanent)

Bonus depreciation lets you deduct the entire cost of qualifying property in the year you place it in service, instead of spreading the deduction over several years.

You can use bonus depreciation on:

• Most personal business property (machines, equipment, furniture, computers)

• Off-the-shelf software

• Certain land improvements (such as landscaping and similar improvements)

What Changed Under OBBBA?

• Bonus depreciation is now 100% for qualifying property acquired and placed in service on or after January 20, 2025.

• Before OBBBA, bonus depreciation had dropped to 60% in 2024, and 40% from January 1 through January 19, 2025.

• The new law makes the 100% deduction permanent.

How It Works in Plain English

If a piece of equipment qualifies and you use it 100% for business, you may usually deduct the entire cost in the year you put it into service.

Example: Buy a $50,000 machine for your shop in 2025 and place it in service—OBBBA may let you deduct the full $50,000 that same year.

Important Limits and Exceptions

• Passenger automobiles (listed property) still face an annual deduction cap of $8,000—you cannot fully expense them with bonus depreciation.

• There is no overall dollar cap on bonus depreciation, even if the deductions create a loss.

• Unused deductions can be carried forward to future years.

• If you do not want to use bonus depreciation, you must opt out for the entire class of assets (for example, all 5-year property).

📌 Section 179: Still Useful, But Less Central

Section 179 expensing is another way to deduct the cost of business assets, but it comes with annual limits and a few extra rules.

OBBBA Changes to Section 179

• The Section 179 deduction limit is now $2.5 million for 2025.

• The deduction begins to phase out at $4 million of qualifying property placed in service.

Section 179 vs. Bonus Depreciation

Because we now have permanent 100% bonus depreciation, many businesses will rely on bonus depreciation more than Section 179. However, Section 179 still has an important role.

Feature Section 179 Bonus Depreciation Business-use requirement Must be used at least 51% for business. Generally follows business-use rules, but less strict for some property. Can it create a loss? No. Section 179 cannot create or increase a loss. Yes. Bonus depreciation can create a loss, and excess can carry forward. Annual dollar limits Yes. Deduction limit of $2.5 million with phase-out starting at $4 million. No overall cap. Limited by property rules and listed-property caps (like cars). Flexibility You can choose specific assets to expense. Generally applies to the whole class of assets unless you opt out.

In practice, Section 179 is often used when you want to target certain items for immediate expensing, while bonus depreciation covers the rest.

🏭 New 100% Deduction for Qualified Production Property

OBBBA also creates a special temporary 100% deduction for certain real property used to manufacture tangible goods. This includes:

• Factories and manufacturing plants

• Refining halls

• Assembly lines and similar production facilities

Normally, these buildings are depreciated over 39 years. Under OBBBA, you may deduct the entire cost in one year if you meet the timing rules.

Timing Rules You Need to Know

• You must build the qualifying property between January 20, 2025 and December 31, 2028.

• You must place it in service by January 1, 2031.

• Certain existing property may also qualify if it was not in service as qualified production property between January 1, 2021 and May 12, 2025.

For manufacturers in areas like Fullerton, Anaheim, Orange, and surrounding Orange County cities, this can significantly speed up tax deductions on major building projects.

Putting It All Together

The One Big Beautiful Bill Act reshapes how businesses deduct the cost of equipment and production property:

• 100% bonus depreciation is now permanent for qualifying personal property.

• Section 179 still matters for its flexibility in choosing specific assets, but it comes with limits and cannot create a loss.

• Manufacturers may benefit from a new, temporary 100% one-year deduction on certain factory and production real estate.

If you’re planning major equipment or building projects in Fullerton or anywhere in Orange County, careful planning can help you take full advantage of these rules and potentially unlock very large deductions in a single year.