As your business grows, so does your opportunity for major tax savings. The recent tax law changes (the OBBBA) have created powerful incentives to invest in your company right now, using deductions that drastically improve your cash flow.

1. Maximize Your Write-Offs: The Dual Strategy

As a small business, you have two key tools for turning equipment costs into immediate tax savings, and we use them together for maximum impact:

1. The first tool is Section 179 Expensing, which allows you to deduct up to $2.5 million of the cost of assets immediately. This deduction is specifically designed for profitable, small-to-midsize businesses.
2. The second tool is 100% Bonus Depreciation. This is crucial because it allows you to deduct the full cost of the asset (100%), even if your purchase exceeds the $2.5 million cap. Bonus Depreciation is also the only tool that can generate a net operating loss (NOL), which you can strategically carry forward to offset future years’ profits.
   
   

2. Your Eligible Investment Checklist

Both deductions apply to new and used assets (if new to your business) placed in service by December 31, 2025.

• Heavy Assets: Machinery, manufacturing equipment, and heavy trucks/SUVs (over 6,000 lbs. GVWR) are excellent candidates for full expensing.
• Technology: Computers, servers, and off-the-shelf software.
• Property: Certain qualified building improvements, like HVAC, roofing, and security systems.

3. Act Now for Maximum Cash Flow

Your financial benefit is tied directly to the purchase date.

1. The Deadline: Assets must be in use at your facility by the end of the calendar year to qualify for the 2025 tax deduction.
2. Our Strategy: We strategically apply Section 179 first to use that generous limit, and then apply 100% Bonus Depreciation to cover any remaining cost. This ensures you leave zero dollars on the table.

Your Next Step 

Tax season is over, but your financial health deserves attention all year long.  

At PSACPA, we’ll work with you to implement smart strategies and give you the peace of mind that your finances are in expert hands. Schedule your free consultation with us today.

Call us: (301)-879-0600 

Email: contact@psacpa.com