Updated for February 2026: The rush that kicked off in 2025 is still echoing into 2026—because the real trigger isn’t hype, it’s timing. Equipment dealers are still fielding nonstop calls, and business owners are still buying trucks, forklifts, excavators, and espresso machines like Congress flipped the tax switch back on.
Welcome to The 2025 Equipment Rush—our campaign name for the 100% bonus depreciation restoration that began in 2025 and continues to shape smarter (and not-so-smart) buying decisions today.
The Big News: 100% Is Back
Under federal tax legislation enacted in 2025, 100% bonus depreciation was reinstated for qualifying property acquired and placed in service after January 19, 2025. Businesses may once again deduct the full cost of eligible equipment, machinery, vehicles, technology, and certain improvements in the year the asset becomes operational, rather than depreciating it over five, seven, or more years.
This restoration reversed the prior phase-down schedule under Internal Revenue Code §168(k). The headline is simple: 100% expensing is available again. The execution is where strategy matters.
Timing Is the Gatekeeper
Eligibility depends on timing. The property must be acquired (generally when a binding contract is entered into) and placed in service (ready and available for its intended business use) after January 19, 2025.
Ordering equipment does not qualify. Financing it does not qualify. It must be operational. Taxpayers may also elect a lower bonus percentage depending on their tax year and planning strategy.
Quick Refresher: What Is Bonus Depreciation?
When you buy equipment, vehicles, or technology for your business, the IRS normally requires depreciation—deducting a portion of the cost each year over its “useful life.” Bonus depreciation accelerates that timeline when the asset qualifies.
Example
You buy a $100,000 excavator. Without bonus depreciation, you might deduct $20,000 a year for five years. With 100% bonus depreciation, you may deduct the entire $100,000 in the year it is placed in service (assuming it qualifies).
That’s not a minor perk—that’s an acceleration of tax benefit that can meaningfully improve cash-flow timing.
The Panic-Buy Phenomenon
Every time Congress restores 100% expensing, something predictable (and slightly chaotic) happens: business owners start panic-buying depreciable assets like the window might close tomorrow.
Trucks sell out. Machine shops run dry. Farmers start calling equipment vendors at midnight like it’s an auction. We once had a client who bought two forklifts “for future expansion.” He didn’t have a warehouse yet—but he did have tax anxiety.
A year later, he called and said, “I have forklifts, but no floor space.” We replied, “You also have a $50,000 deduction, so… partial congratulations?”
Moral: Bonus depreciation is a tax tool—not a shopping strategy.
The Strategic Playbook
Here’s how to use 100% bonus depreciation without turning your business into a storage yard.
1. Match Equipment to Cash Flow
Yes, the tax write-off is tempting—but deductions don’t make loan payments. If the purchase strains liquidity, it’s not a strategy; it’s stress in disguise.
2. Know What Qualifies
Eligible assets typically include:
- Machinery, vehicles, and equipment
- Computers, furniture, and certain software
- Qualified improvement property and certain improvements where applicable
Used equipment can qualify if it is “new to you,” but real estate and land do not qualify.
3. “Placed in Service” Means Operational
The deduction begins when the asset is ready and available for use—not when you swipe the card. Delivery must be complete. Installation must be complete. The asset must be functional.
Your order confirmation does not count. The IRS does not reward “pending shipping.” Bottom line: the deduction follows the placed-in-service date—not the payment date.
4. Combine with Section 179
Section 179 remains available with inflation-adjusted limits for 2025 (approximately $1.29 million, phasing out after approximately $3.2 million of qualifying purchases). A coordinated strategy between Section 179 and bonus depreciation can optimize results depending on income levels, entity structure, and state conformity rules.
5. Plan with the Current Rules—But Stay Flexible
Tax law changes quickly. While 100% bonus depreciation is currently restored for qualifying property acquired and placed in service after January 19, 2025, elections, entity-level limitations, and state nonconformity can materially affect outcomes.
The smart move is to plan the purchase, timing, financing structure, and documentation before committing.
Real-Life Example
A construction firm we advise purchased $850,000 of heavy machinery in early 2025. We structured financing, verified placed-in-service documentation, and applied full bonus depreciation under current law.
Result: They reduced taxable income by $850,000, generating approximately $178,000 in federal tax savings. Same business. Same revenue. Better planning.
Meanwhile, a competitor delayed their purchase and missed the optimal timing window for their specific tax situation. In tax strategy, timing is leverage.
The Fine Print You Can’t Ignore
- Vehicles over 6,000 lbs. GVWR may qualify, but business-use thresholds (generally over 50%) must be met.
- Luxury vehicle and SUV limitations may reduce allowable deductions. (The IRS does not reward vanity plates.)
- Bonus depreciation can create net operating losses, but basis, at-risk, passive activity, and other entity-level limitations may apply.
- State tax treatment varies, and many states do not conform to federal bonus rules.
Translation: a structured tax plan beats a fast purchase.
Fun Fact Corner
- When 100% bonus depreciation was previously expanded in 2017, equipment purchases surged nationwide.
- During prior full-expensing years, a majority of small businesses elected accelerated depreciation when eligible.
- One taxpayer once attempted to bonus depreciate a yacht as “client entertainment.” The IRS disagreed—strongly.
The JS Morlu Strategy
At JS Morlu, we don’t just record deductions—we structure them. Our Capital Investment & Tax Planning Program includes ROI and cash-flow modeling for asset purchases, Section 179 and bonus optimization, state conformity and entity limitation analysis, placed-in-service documentation review, and quarterly strategic planning before major acquisitions.
Buying equipment is operational. Structuring it properly is strategic.
The Bottom Line
100% bonus depreciation is back—but so are the mistakes. Don’t join the panic buyers or the procrastinators. Join the planners.
Buy what builds capacity. Deduct what builds advantage. Align timing with strategy—not emotion.
Thinking About a Major Equipment Purchase in 2026?
Before signing a contract, model the impact. The difference between ordering equipment and placing it in service at the right time can be substantial. Strategic planning before acquisition often matters more than the deduction itself.
Book your Capital Investment Tax Strategy Session today. We’ll help you calculate, qualify, and capitalize—before the rush becomes regret.