Preface: “The chief business of the American people is business. They are profoundly concerned with producing, buying, selling, investing, and prospering in the world.” – Calvin Coolidge, January 25, 1925
Big Tax Changes Ahead: What You Should Know About the One Big Beautiful Bill (OBBB) and Bonus Depreciation
On July 4, 2025, President Trump signed a major new tax law called the One Big Beautiful Bill Act (OBBB). This law updates the U.S. tax code in big ways. It retains some tax breaks from past laws, ends or modifies others—especially green energy incentives—and introduces new benefits for both individuals and businesses.
One of the biggest changes affects bonus depreciation, a rule that allows businesses to immediately deduct the full cost of certain types of property and equipment. Let’s break down what bonus depreciation is, what’s changed under the OBBB, and how it may benefit you or your business.
What Is Bonus Depreciation?
Bonus depreciation allows a business to write off the full cost of certain assets in the year they are placed into use, rather than spreading the deduction over several years.
You can use bonus depreciation for:
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- Equipment and machinery (like trucks, tools, and factory machines)
- Computers and software
- Certain plants and trees
- Water utility property
Both new and used property may qualify, as long as it was bought and put into service after September 27, 2017.
Under the older Tax Cuts and Jobs Act (TCJA), the bonus depreciation was:
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- 100% from 2017–2022
- Then dropping by 20% each year until it reached 0% in 2027
What Did the OBBB Change?
The OBBB reverses the phase-out and makes 100% bonus depreciation permanent—but only for property bought after January 19, 2025.
That means if you buy and start using qualified property after that date, you can deduct the full cost right away, saving money on taxes upfront.
Here’s a quick summary of changes:
| Property Type | Old Rate (2025) | New OBBB Rate |
| Regular Property | 40% | 100% |
| Long Production Property (like aircraft) | 60% | 100% |
Transition Option for 2025
If you buy property in your first tax year after January 19, 2025, you can choose to use the older lower rate (like 40% or 60%) instead of the new 100% rate. This might be helpful if you want to spread out deductions or if you’ve already planned your taxes using the older rates.
Special Expensing for Sound Recordings
The OBBB also adds a new tax break for music and audio production.
If you record music or sound in the U.S., you can now deduct up to $150,000 of those costs immediately.
But there’s a catch: this benefit expires after December 31, 2025. Also, if you claim the deduction but don’t start production before that date, the IRS may take the deduction back.
Tip: To be safe, make sure your sound recording starts before the end of 2025.
What About Qualified Production Property?
The OBBB creates another bonus depreciation option for something called qualified production property—basically, certain types of commercial real estate used for manufacturing.
Here’s how it works:
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- The building must be constructed after January 19, 2025, and before January 1, 2029
- It must be placed in service by December 31, 2030
- You must use the building yourself (you can’t rent it out and still claim this benefit)
- The property must be used for manufacturing, refining, or producing physical products
Offices, software development, sales buildings, and parking garages do not qualify. But a new facility used to build furniture, machine parts, or packaged food would qualify.
If a natural disaster (an “Act of God”) delays your building, you may be allowed a little more time to place it in service.
Planning Tips
Here’s what all this means in simpler terms:
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- Buy smart after January 19, 2025: If you’re thinking about buying new machinery, tools, or equipment, doing it after this date could mean a 100% tax deduction up front.
- Think beyond equipment: If you’re in the music industry, you could deduct up to $150,000 in sound recording costs—but you must act before 2026.
- Build for manufacturing: If you’re planning to build a new factory or production facility, this is a golden opportunity. You can write off the entire cost much faster, boosting cash flow.
- Watch the deadlines: The rules are strict about when property must be built and placed in service. Missing a date can cost you thousands in tax savings.
Final Thoughts
The One Big Beautiful Bill Act is full of significant changes, and bonus depreciation is one of the most effective tools businesses can use to lower their taxes.
Whether you run a construction company, own a factory, or produce music in a studio, this law could help you save money, but only if you plan ahead.
As always, consult a tax professional before making significant financial decisions. The new rules can be complex, and a CPA can help you determine what qualifies and how to report it accurately.
Want to explore whether your equipment, sound recordings, or new building project qualifies? Contact our office today to schedule a tax planning consultation.