Bonus Depreciation 2024. Bonus depreciation is an accelerated form of depreciation — it allows you to deduct a fixed percentage (80% for 2023) of an asset’s cost upfront instead of spreading the deduction. Bonus depreciation is a tax incentive that allows a business to immediately deduct a large percentage of the purchase price of eligible assets, such as machinery, rather than write them off.
Bonus depreciation comes into play after the section 179 deduction limit is reached. The bonus depreciation rate was reduced to 80% for property placed in service in 2023, and is set to be reduced to 60% in 2024, 40% in 2025, 20% in 2026,.
