Bonus Depreciation 2026 & 2027 Calculator
Calculate your first-year bonus depreciation for assets placed in service in 2026 or 2027 — the 100% rate was restored and made permanent under the One Big Beautiful Bill (OBBB, P.L. 119-21). Compare to MACRS depreciation without bonus. Free, private, no sign-up.
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What is bonus depreciation and how did OBBB restore it?
Bonus depreciation is an additional first-year deduction under IRC §168(k) that lets businesses immediately write off a percentage of the cost of qualifying new or used tangible property. Under the 2017 TCJA, bonus was 100% for property placed in service from 2017 through 2022, then began a 20-percentage-point annual phasedown — 80% in 2023, 60% in 2024, 40% in 2025, 20% in 2026 and 0% from 2027 onward.
The One Big Beautiful Bill Act (OBBB, P.L. 119-21, signed July 2025) reversed the phasedown and reinstated 100% bonus depreciation, permanently, for property acquired and placed in service after January 19, 2025. There is no more scheduled sunset and no further phasedown. Both new and used property qualify, provided the taxpayer did not previously use the property.
Which assets qualify for bonus depreciation in 2026 and 2027?
Qualifying property generally includes assets with a MACRS recovery period of 20 years or less — meaning most machinery, equipment, vehicles, furniture, computers, off-the-shelf software, and Qualified Improvement Property (QIP, the interior of nonresidential buildings). Buildings themselves (39-year nonresidential or 27.5-year residential) do NOT qualify because they exceed the 20-year limit.
Special rules apply for passenger autos under §280F: the Year 1 cap (with bonus) is approximately $20,400 for 2026, with regular MACRS continuing afterward. Heavy SUVs over 6,000 lb GVWR are not subject to the §280F cap and can take the full bonus on the business-use portion (subject to §179 small-vehicle limit of $31,300 for 2026 if §179 is used instead).
Bonus depreciation vs Section 179 — which to choose
Section 179 lets you immediately expense up to $1,250,000 (2026) with a $3,130,000 phase-out start, but is limited to taxable income (no §179 loss) and applies only to property used in active trade or business. Bonus depreciation has no income limit, no dollar cap, and CAN create a loss that carries forward as NOL. In 2026 and 2027, most filers will prefer bonus depreciation precisely because the 100% rate is back and the NOL flexibility is greater.
If you have multiple assets and want to pick and choose, §179 is asset-by-asset elective. Bonus depreciation is automatic for all qualifying property unless you elect out — by class life — on Form 4562. Cost segregation studies remain valuable: they reclassify portions of a building purchase into 5-, 7- or 15-year property that immediately qualifies for the restored 100% bonus.
Source: irs.gov — Publication 946 (How To Depreciate Property) and OBBB §70302. Updated May 2026 reflecting OBBB (P.L. 119-21).