What is the Bonus Depreciation rate for 2024 and 2025?

Under the Tax Cuts and Jobs Act (TCJA), Bonus Depreciation is 60% for assets placed in service in 2024, stepping down to 40% in 2025 and 20% in 2026.

Updated: August 2026 • Verified v1.2

IRS Section 179 & Bonus Depreciation Equipment Write-Off Calculator

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Sec179 = min(cost, limit - excess); Bonus = (cost - Sec179) * bonusRate; MACRS = (residual) * 20%; CashSavings = Total * TaxBracket

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Understanding Your Results

Provides an itemized depreciation waterfall: Section 179 deduction, Bonus Depreciation on remaining basis, MACRS Year 1, and net out-of-pocket equipment cost.

Practical Guidance & Next Steps

To qualify for Section 179, business use must exceed 50%. Heavy SUVs with GVWR > 6,000 lbs are capped separately ($30,500 in 2024). Bonus depreciation phases down by 20% annually.

What is this?

A small business tax calculator that computes first-year equipment depreciation write-offs under Section 179 and Bonus Depreciation.

How does it work?

1. Select tax year and enter equipment purchase cost. 2. Specify total business CapEx placed in service to test phase-out limits. 3. Review your first-year Section 179 deduction, Bonus Depreciation, and net cash tax savings.

Why use it?

Empowers business owners to optimize equipment purchase timing and maximize immediate first-year tax deductions.

Technical Scope & Calculation Limitations

Based on IRS rules for 2024 (60% bonus), 2025 (40% bonus), and 2026 (20% bonus). Consult a tax accountant regarding state-level Section 179 conformity.

Frequently Asked Questions

For 2024, Section 179 begins to phase out dollar-for-dollar once total qualifying equipment purchases exceed $3,050,000, phasing out completely at $4,270,000.

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