President Donald Trump discussed many second-term tax priorities in his March 4 address to Congress, including a proposed restoration of 100% bonus depreciation. It allows businesses to deduct the costs of certain assets in the first year they’re acquired, rather than depreciate them over time. The Tax Cuts and Jobs Act included bonus depreciation at a 100% rate through 2022. However, in 2023, bonus depreciation began phasing out at 20% per year. Currently, the rate is 40% and it will drop to 0% in 2027 unless Congress acts to restore it. Supporters see a return to 100% bonus depreciation as a way to grow the economy. Stay tuned.
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