Here’s what HIVE AI had to say about “How do bonus depreciation rules apply to small businesses this season?”:
Bonus depreciation for small businesses this season (2025 returns filed in 2026)
Bonus depreciation (the special depreciation allowance under IRC § 168(k)) is not limited to “small businesses” specifically; it depends on whether you placed qualifying property in service during your 2025 tax year and whether it meets the qualified property rules.
1) For most qualified property placed in service in 2025: generally 40%
For qualified property (other than long-production-period property and certain aircraft) placed in service after December 31, 2024, and before January 1, 2026, the special depreciation allowance is generally 40% of the depreciable basis. Publication 946 summarizes the same 40% rule for that placed-in-service window (with special 60% rules for certain long-production-period property and certain aircraft).
2) Special rule beginning after January 19, 2025: 100% reinstated (with an election to use 40% in the first affected year)
The IRS instructions reflect that a new law reinstated 100% bonus depreciation for certain qualified property acquired and placed in service after January 19, 2025; for the first tax year ending after January 19, 2025, you can elect to claim 40% (60% for long-production-period property and certain aircraft) instead of 100%.
3) What “qualified property” generally includes (common small business assets)
Qualified property generally includes MACRS tangible property with a recovery period of 20 years or less, certain computer software, water utility property, and certain qualified film/TV/live theatrical productions (and other categories listed in the IRS instructions).
Sources
1 – Instructions for Form 4562 (2025)
2 – Publication 946 (2025), How To Depreciate Property
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