A major tax update was recently signed into law, and it could meaningfully impact business finances for years to come. The One Big Beautiful Bill Act (OBBBA), passed on July 4, 2025, includes a key provision that permanently restores 100% bonus depreciation. For many business owners, this creates a valuable opportunity to upgrade equipment, vehicles, or systems while making the most of accelerated deductions. Levitate CPA, a modern CPA firm in Raleigh, is breaking it down to help you understand what changed and how you might benefit.
Below, we walk through the updates in clear, practical terms—supporting better tax planning, smarter decisions, and a more proactive tax strategy for small business accounting, LLC taxes, S Corps, and more.
Quick Summary:
The OBBBA permanently reinstates 100% bonus depreciation for qualifying assets placed in service starting January 20, 2025. This allows businesses to deduct the full cost of eligible equipment, improvements, or software in the first year, offering meaningful tax savings and improved cash flow.
What Changed Under the OBBBA?
One of the most important provisions of the new law is the return of permanent 100% bonus depreciation. Previously, bonus depreciation was scheduled to phase down to 40% in 2025, which would have reduced upfront deductions for many business owners. With the OBBBA, the deduction is now fully restored and no longer on a sunset schedule.
- Businesses can now deduct 100% of the cost of qualifying assets placed in service starting January 20, 2025.
- This bonus depreciation rule is now permanent, reversing the prior phase-down schedule (previously 40% for 2025).
- Bonus depreciation allows businesses to deduct the full cost of eligible assets—like computers, furniture, or building improvements—in the year they’re placed in service.
Which Assets Qualify?
The rule covers a wide range of business-related assets, making it relevant whether you run an LLC, S corporation, or growing service-based business. Qualifying property includes:
- Equipment and machinery with a useful life of 20 years or less
- Qualified improvement property (such as renovations to commercial buildings)
- Computer software
- Certain business vehicles, with weight and use restrictions
These updates are especially useful for teams investing in technology upgrades, expanding operations, or planning to modernize their workflows—areas where many Levitate CPA clients benefit from guidance through our small business accounting and QuickBooks CPA support.
How Bonus Depreciation Supports Cash Flow
One of the biggest financial advantages comes from timing. By deducting the full cost upfront, businesses reduce taxes in the year of purchase instead of spreading deductions over several years. This helps:
- Increase available working capital
- Improve cash flow
- Free up funds for reinvestment in staffing, system upgrades, or expansions
This can be especially impactful for companies planning significant purchases—such as acquiring a fleet of vehicles, upgrading software systems, or investing in more efficient equipment. It also offers more flexibility to time purchases based on operational needs and tax strategy.
State Conformity and Other Considerations
Not all states may conform to federal bonus depreciation rules. It's important to review local requirements and consider how state-based differences could affect your return. A responsive accountant or friendly tax firm like Levitate CPA can help you navigate state-level nuances while supporting areas like 1040 prep, quarterly tax estimates, BOI reporting, payroll support, and retirement tax planning.
Making the Most of the New Law
This update creates a rare opportunity for upfront tax savings and strategic financial planning. If you were already considering new equipment, vehicles, or improvements, this may be the right moment to evaluate timing and impact. With the right proactive tax strategy, businesses can make confident, informed decisions that support both short-term cash flow and long-term growth.
If you have upcoming purchases or want clarity on how bonus depreciation affects your LLC taxes, S Corp CPA needs, or overall bookkeeping services, now is the time to talk with a tax advisor. Review your plans, assess your options, and connect with a CPA firm like Levitate CPA to understand how this update could benefit your specific situation.
