100% Bonus Depreciation in 2026: What to Review Before You Buy

Restaurant owner and chef reviewing an equipment purchase checklist for 100% bonus depreciation in 2026.

100% bonus depreciation is back, and business owners are asking a question I hear a lot this time of year: should we buy that equipment before December to save on taxes? My answer starts with a different question: Do you need it? Buying equipment is an operating decision first and a tax decision second. That order matters even more when a tax incentive makes a purchase look more attractive.

Start with what the purchase would do for your business. Will it replace equipment that keeps breaking down, improve productivity or support a location that needs additional capacity? The tax benefit should support that decision, rather than become the reason for it.

What changed for bonus depreciation in 2026?

Under Section 168(k), qualifying depreciable property acquired and placed in service after January 19, 2025 can generally qualify for a 100% additional first-year depreciation deduction. IRS Notice 2026-11 lays out interim rules. The details still decide the outcome: how the asset is classified, when it was acquired, when it was placed in service, how it’s used in the business, and the other requirements in the guidance. Not every renovation or real estate cost qualifies.

Before counting on bonus depreciation, gather the purchase agreement, invoice and any delivery or installation records. Having these details together gives your tax advisor a clearer starting point for reviewing the asset and identifying any questions that need to be resolved.

Where it comes up

For a restaurant group, it’s usually kitchen equipment. For a contractor, vehicles or machinery. For a supermarket, refrigeration and point-of-sale systems. Certain used assets can qualify too, but special conditions apply. Buildings generally don’t qualify just because you bought or renovated them. A cost segregation analysis can help identify eligible components, but it has to be backed by facts and documentation.

For businesses with several locations or entities, organize the proposed purchases by location and purchasing entity. Include what each asset will be used for and its expected cost. Reviewing everything together makes it easier to see the full spending commitment before approving individual purchases.

A deduction is not a reimbursement

This is a common misunderstanding. A $100,000 eligible purchase does not turn into a $100,000 tax refund. A deduction reduces taxable income, and what it actually saves depends on the business’s facts and other tax rules. Before you commit, look at financing, liquidity, projected taxable income, state treatment, potential recapture and your longer-term depreciation strategy. And please don’t buy something you don’t need just to claim a deduction.

Ask for a side-by-side review of the purchase cost, estimated tax benefit and effect on available cash. If financing is involved, include the ongoing payments in that conversation. A smaller tax bill does not remove the responsibility to pay for the equipment.

Five questions to answer before year-end

Which assets do we actually need to improve operations?
When were they acquired, and when will they be ready and available for business use?
Which costs qualify, and what documentation supports the classification?
What does this do to our current and future federal and state tax liabilities?
How will the purchase affect our cash reserves and financing covenants?

Bring these questions to your accountant while there is still time to review 100% bonus depreciation fits your plans. . Share the proposed purchases, expected timing and financing terms together. That conversation is more useful before a commitment is made than after the equipment has already been purchased.

How we help

At NeatBooks, our tax planning and preparation services tie the tax analysis to the accounting records, the fixed asset schedules and the cash flow decisions coming up. For multi-location operators, we can organize asset-level data across entities and coordinate the planning before returns are prepared.

The goal is to understand how 100% bonus depreciation fits into a purchase that already makes business sense. Clear records and an early conversation help keep the operational decision, tax analysis and cash flow review connected..

Planning a major equipment purchase? Let’s talk before you sign anything. Schedule a tax planning conversation with NeatBooks.