✨ What’s new

100% bonus extension is dead for now. As most of you know, bonus is currently phasing down by 20% each year from 100% in 2022 to 0% in 2027. The House of Representatives approved a tax bill back in February which included an extension of 100% bonus for 2023 thru 2025.

The final vote tally was 357-70, so the legislation had broad bipartisan support at the time. The bill then moved on to the Senate, where it stalled until finally being put out of its misery today. After months of gridlock, the Wyden-Smith tax bill failed to get cloture by a vote of 48-44 and will not move forward in its current form.

What does this mean for you? The following bonus depreciation %’s remain in effect under the current law (based on year property is placed in service):

• 2018-2022: 100%

• 2023: 80%

• 2024: 60%

• 2025: 40%

• 2026: 20%

• 2027 and forward: 0%

Cost seg example comparing 100% vs. 80% vs. 60% bonus

⏭️ What’s next?

Many provisions in the 2017 Tax Cuts and Jobs Act (TCJA) are scheduled to expire at the end of 2025. Congress will face significant political pressure from voters and businesses to address the situation next year. Regardless of the results of the November 2024 election, it is likely that the new President and Congress will be forced to act in some way. Whether that action includes an extension of 100% bonus remains to be seen.

📤️ Referrals

Did you enjoy working with MVO on your project? Do you know others who may benefit from the valuable services we provide? Don’t keep us a secret!

We love it when happy clients share their great experiences with others. How you can help:

• Give us a shout out on Twitter: @mvocostseg

• Share our contact information with your network: [email protected]