Bonus Depreciation Calculator 2025
Calculate your first-year tax deduction using bonus depreciation, Section 179, and MACRS under the Tax Cuts and Jobs Act
Asset Information
First-Year Deduction
📉 Bonus Depreciation Phase-Out
| Year | Bonus % | Your Deduction | Tax Savings |
|---|---|---|---|
| 2023 | 80% | $88,574 | $21,258 |
| 2024 | 60% | $68,574 | $16,458 |
| 2025 | 40% | $48,574 | $11,658 |
| 2026 | 20% | $28,574 | $6,858 |
| 2027 | 0% | $8,574 | $2,058 |
💡 Maximize Deductions
- • Act before Dec 31: Purchase by year-end to qualify
- • Section 179 first: Use before bonus if under income limit
- • 100% expensing: Combine both for maximum benefit
- • Phase-out warning: Bonus decreases 20% annually
- • Used property OK: Eligible since 2018 TCJA
⚠️ Limitations
- • Section 179 cap: \$1,220,000 max (2025)
- • Spending threshold: Phases out after \$3.05M
- • Income limit: Section 179 limited to taxable income
- • Listed property: >50% business use required
- • Qualified property: Must be placed in service
📚 Understanding Bonus Depreciation
What It Is
Bonus depreciation allows deducting a large percentage of an asset's cost in year one, rather than spreading over its useful life. Was 100% through 2022 under TCJA.
Phase-Out
Decreases 20% yearly: 80% (2023), 60% (2024), 40% (2025), 20% (2026), 0% (2027+). Act before it expires completely!
vs. Section 179
Section 179 has dollar caps but no phase-out. Bonus has no cap but expires. Use Section 179 first for maximum flexibility.
Disclaimer: This calculator provides estimates only. Actual deductions depend on asset type, use percentage, and tax law changes. Consult a tax professional for advice specific to your situation. Section 179 and bonus depreciation rules subject to annual limits and legislative changes.