Did your social media feed feel like it turned into a tabloid this weekend?
If it looked anything like mine, it was overrun by memes and parodies — thanks to a now-former CEO and an awkwardly timed moment on the Coldplay kiss cam. What followed was the kind of PR disaster no company wants to find itself in.
If you’re a business owner, this should be more than just gossip for you. I suggest using this as a helpful reminder to reflect on your own internal policies and expectations.
Do you have a code of conduct that actually reflects how you want your team to represent your Southeastern Wisconsin business? Are there open lines of communication if someone on your team sees something concerning?
And perhaps more urgently: if something did go sideways tomorrow, how prepared are you to respond?
Having a plan for moments like this protects your business. And that kind of proactive thinking is exactly why I’ve been encouraging clients to get familiar with some major new legislation that could directly affect how you plan and spend in the months ahead.
I’m talking about the One Big Beautiful Bill Act (OBBBA).
While I don’t offer tax advice (your CPA can offer much better guidance on tax things), I do help my clients think through smart timing and strategic investment decisions. And this bill has major implications for both. Specifically, it could reshape how you approach things like equipment purchases, renovations, technology upgrades, and more over the next couple of years.
So let’s break this down. Some of the biggest OBBBA provisions affecting your business include:
- Permanent extension of the Qualified Business Income (QBI) deduction: that 20 percent write-off isn’t going anywhere for pass-through entities.
- Permanent 100 percent Bonus Depreciation: today’s topic.
- Permanent expensing of domestic research and experimental (R&E) costs: reversing the previous capitalization requirement from the TCJA.
- No tax on tips or overtime: meaning, you may need to update your payroll systems.
- Elimination of several clean energy credits: including solar and EV incentives for business property use.
- Expanded employer tax credits: including a higher employer-provided child care credit and permanent employer credit for paid family and medical leave.
Today, I want to dig deep into the one that’s likely to affect nearly every capital-expenditure decision you make moving forward: Bonus depreciation.
Bonus Depreciation 2025 for Milwaukee Business Owners
“If a window of opportunity appears, don’t pull down the shade.” —Tom Peters
Bonus Depreciation 2025: Quick Answers
- 100 percent Bonus depreciation is now permanent under the One Big Beautiful Bill Act (OBBBA).
- Assets must be placed in service after January 19, 2025, with contracts signed on or after that date.
- Used equipment still qualifies if it wasn’t previously used in your business or bought from a related party.
- Renovations and improvements may also qualify – but require a closer look (potentially a cost segregation study)
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Let me start off with a hypothetical: Let’s say, earlier this year, you bought a new POS system for 95K and rolled out 50K in leasehold improvements to accommodate it.
If you signed the contract and installed it after January 19th? You can deduct the full 145K in year one. And if you’re in the top tax bracket, that could mean 50K+ in immediate tax savings.
How?
The One Big Beautiful Bill Act (OBBBA).
And it means more opportunities for you to invest in the things that grow your Milwaukee business.
Of course, the exact tax treatment depends on several factors, and your CPA is the person to go over that with you. But from a business planning standpoint, this legislation opens up a big opportunity to rethink the timing and structure of big investments. Let me explain…
Bonus Depreciation 2025: How it Works
The One Big Beautiful Bill Act (OBBBA) permanently reinstated 100 percent bonus depreciation for qualified property placed in service on or after January 19, 2025. But only if the binding contract to acquire the asset was also signed on or after that date.
And that “contract date” distinction could mean the difference between writing off 40 percent of an asset’s cost… or 100 percent of it in the current year.
(However: States may not conform fully to OBBBA, so make sure to review your state’s tax treatment.)
Let’s go back to our POS system example. If you placed it in service back in early January (before January 19th), and you had already signed the deal in December, then you’re only allowed 40 percent bonus depreciation, coming out to 58K in deductions.
But if you signed the contract after January 19 and installed it after that, too, you’re eligible to deduct the full 100 percent (145K) in year one.
Bonus Depreciation 2025: What Qualifies?
You can fully expense almost anything with a Modified Accelerated Cost Recovery System (MACRS) recovery period of 20 years or less, including:
- Machinery and manufacturing equipment
- Office furniture, fixtures, and computers
- Technology infrastructure (owned, not leased SaaS)
- Vehicles (over 6 thousand lbs.)
- Interior renovations in nonresidential buildings
- 15-year assets like parking lots, paving, lighting, and landscaping
And yes, used assets still qualify, as long as:
- You didn’t use it before for your business
- You bought it from an unrelated seller
- It hasn’t already been depreciated in your business
If any of your future purchases fall into these categories, it’s worth raising the topic with your CPA before finalizing the deal.
What if I Bought an Asset Before January 19, 2025?
If you signed the contract or placed an asset in service before January 19, you’ll fall under the old rules. Which means you can likely deduct only 40 percent of the cost up front. But there are still options to boost your deduction:
- Do a cost segregation study: You might move parts of the purchase into shorter-life buckets (5-, 7-, or 15-year) and still get favorable treatment. For example: if it’s a building or renovation, we can break out parts of it (like lighting, HVAC, flooring) that may qualify for full 100 percent depreciation even if the overall project doesn’t.
- Use Section 179 expensing instead: For smaller purchases, or if you’re in a state that doesn’t follow federal bonus rules, Section 179 might let you write off the full amount anyway.
Bonus Depreciation 2025: What You Should Be Doing Right Now
If you’re eyeing major purchases or improvements for your business later this year, here’s a checklist to help you prepare:
- Coordinate early with your tax advisor.
- Consider a cost segregation study if you’re renovating, building out, or upgrading commercial property.
- Evaluate purchase timing and contract dates to ensure eligibility under the new rules.
- Review your projected cash flow and tax planning scenarios.
FAQ
“I’m doing a full renovation of my office this fall. Does any of that qualify for bonus depreciation?”
Absolutely. Especially if the work includes interior buildouts in a nonresidential building. That falls under Qualified Improvement Property (QIP), which is depreciable over 15 years and fully eligible for 100 percent bonus.
Examples include:
- Non-structural walls
- Lighting
- Flooring
- Ceilings
- HVAC systems
But of course, make sure to run things by your CPA for exact details.
“Does this mean I should buy equipment right now?”
Maybe. If you’re planning to upgrade equipment or expand operations anyway, it may make sense to align those purchases with these new rules to maximize the benefit. But the real answer depends on your tax picture – which is why coordinating with your accountant is key.
“I bought a building a few years ago. Can I still get bonus depreciation for parts of it now?”
Yes. You’ll need to do a cost segregation study to find out which components qualify for retroactive 100 percent bonus depreciation under the new OBBBA rules. Then you’d file Form 3115 to make an automatic accounting method change and catch up all that missed depreciation in your current tax year (a process you’ll want your CPA to assist with).
“Should I use Section 179 or bonus depreciation for my new purchases this year?”
The choice of which to use, or whether to use both, depends on your specific circumstances, the types of assets, your income levels, and your overall tax strategy. Your accountant can help you model both options to see which mix gives you the best cash flow and tax positioning.
“Does this apply to vehicles too?”
Yes, but with some caveats. Heavy SUVs, pickups, or work vans generally qualify for full bonus depreciation. But if it’s under 6 thousand lbs, the luxury auto limits kick in and cap the amount you can deduct.
“How does this affect my quarterly estimated taxes and cash flow?”
A large bonus depreciation deduction can dramatically reduce your tax liability for the year, sometimes even creating a net operating loss (NOL). That affects your estimated payments and your cash reserves (and may even open up refund opportunities).
Talk to your tax pro to run projections, update your tax plan mid-year, and make sure your estimated payments stay aligned with your real liability.
How I can help…
If you’re planning to make equipment purchases, upgrades, or property improvements this year, the tax landscape is as favorable as it’s been in a long time. And my role here is to help you think strategically about an opportunity like this. I’m more than happy to collaborate with your go-to tax advisor to make sure your purchase decisions are well-informed.
So, let’s chat about it: 414-325-2040