Tax Planning
Tax Planning 2026: Maximizing Depreciation Benefits Under the One, Big, Beautiful Bill
Business owners can accelerate deductions significantly under the 100% bonus depreciation provision introduced by the One, Big, Beautiful Bill—learn how to apply it and when it makes sense.
By NomadicTax Research Team • 5-8 min read • July 3, 2026
## What is 100% Additional First-Year Depreciation?
The One, Big, Beautiful Bill (OBBBA) permanently amended IRC § 168(k) to allow **100% bonus depreciation** on qualified property acquired **after January 19, 2025**, and placed in service after that date. This includes specified plants and even eligible sound recording productions. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-issue-guidance-on-the-additional-first-year-depreciation-deduction-amended-as-part-of-the-one-big-beautiful-bill?utm_source=openai))
## Who Benefits Most?
- Businesses purchasing **equipment, machinery, or other tangible qualified property** meeting the acquisition/use criteria will see accelerated deductions.
- Projects in the **sound recording** industry can also benefit if recording commences in taxable years ending after July 4, 2025. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-issue-guidance-on-the-additional-first-year-depreciation-deduction-amended-as-part-of-the-one-big-beautiful-bill?utm_source=openai))
## How to Use It: Actionable Steps
1. **Identify qualified property** you plan to purchase in 2026. It must be acquired and placed in service after Jan. 19, 2025.
2. **Decide if you want 100% or elect down to 40%** (or 60% for long-production period property or aircraft). For first tax year ending after the acquisition date; check IRC § 168(k)(5) and (10). ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-issue-guidance-on-the-additional-first-year-depreciation-deduction-amended-as-part-of-the-one-big-beautiful-bill?utm_source=openai))
3. **Track sound recording productions**: If you’re in music/recording, note when production begins and ensure it aligns with taxable year requirements.
4. **Consult with your tax advisor** to understand impacts on cash flow, AMT exposures, and coordinated depreciation across assets.
## Practical Example
Say you’re a manufacturer buying production machinery for \$1M in February 2026, and placing it in service immediately. Under OBBBA, you could deduct the full cost **in year one**, rather than spreading it over 5–7 years. If you instead elect 40% (for any reason), you’d still depreciate the rest over the standard periods.
## Warnings & Considerations
- **Mixed-use property** (used in business and personal capacity) only gets pro-ration for business portion.
- **Changing use** or **later sale** may trigger recapture rules—keep clear records.
- Though permanent, eligibility thresholds and election timing are critical. Late-year acquisitions could make paperwork-heavy compliance necessary.
## Summary
If you’re planning capital investments, OBBBA’s 100% bonus depreciation is a huge opportunity. With proper planning, you can pull forward deductions, improve cash flow, and reduce taxable income—with fewer complexities than before—but good coordination with tax professionals is essential.