Discover how the One Big Beautiful Bill Act (OBBBA) elevates Section 179 expensing limits—now $2.5 million with a $4 million phase‑out, indexed for inflation. This change empowers small and mid‑sized businesses to fully deduct qualifying equipment and software, especially when used with AI tax research and agentic AI in tax planning tools. Enhance your tax strategy now—find out how!
Introduction
The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, introduces major changes to business deductions, including enhancements to §179 expensing. Firms leveraging AI tax tools and agentic AI in tax planning can now optimize deductions, improve compliance, and unlock tax-saving opportunities faster.
What §179 Expensing Covers Under OBBBA
- New Dollar Limits: OBBBA raises the annual Section 179 expensing cap to $2.5 million, with a phase‑out threshold starting at $4 million of qualifying purchases, both fully indexed for inflation.
- Eligible Assets: Deductible property now includes tangible equipment, specified software, and certain nonresidential building improvements placed in service after December 31, 2024 .
- Permanent Provision: This expensing is now permanent—no need to worry about extensions.
These changes offer a streamlined alternative to bonus depreciation—particularly impactful in states that don’t conform to bonus depreciation but accept §179 expensing.
Why AI Tax Tools Matter More Than Ever
1. Rapid Classification & Compliance
AI-powered tax research platforms quickly identify qualifying assets and calculate limits, ensuring your §179 deductions are maximized and compliant.
2. Strategic Tax Planning
An agentic AI in tax planning dynamically analyzes when to expense versus depreciate, aligning decisions with cash flow, EBITDA considerations, and state conformity—all in real time.
3. Inflation Tracking & Threshold Guidance
AI tools monitor current inflation adjustments to §179 thresholds, alerting users as they approach or pass phase‑outs and optimizing asset placement timing.
Summary
OBBBA raises the stakes for §179 expensing—lifting annual limits to $2.5 million and indexing for inflation—with permanence and expanded eligibility. Coupling this new tax landscape with AI tax research and agentic AI tax planning tools can supercharge tax strategies, enhance compliance, and maximize savings.
Ready to optimize 179 expensing impact? Connect with our AI-driven tax planning services today and ensure your 179 expensing work smarter. Discover how our platform empowers advisors and taxpayers to harness OBBBA’s benefits with confidence.
Try our AI tax tool today or book a free demo and see how you can serve your clients with confidence, accuracy, and speed.