Updated November 2026 · VG CPA PC advisors
Section 179
Section 179 lets businesses elect to expense qualifying property, up to $2.5 million for property placed in service after 2024, phasing out dollar for dollar once purchases exceed $4 million (both indexed). The deduction cannot exceed business taxable income, so it cannot create a loss, though the excess carries forward.
It can be applied asset by asset and covers certain improvements to nonresidential buildings, such as roofs, HVAC, fire protection and security systems.
Bonus depreciation
The 2025 law made 100% bonus depreciation permanent for qualifying property acquired after January 19, 2025. Bonus has no dollar or income limit and can create a net operating loss. It applies automatically by class of property unless you elect out.
Qualified improvement property, interior improvements to nonresidential buildings, is 15-year property eligible for bonus.
Choosing and state rules
Many states, including Virginia and Maryland, do not follow federal bonus depreciation, while more states conform to section 179, sometimes with lower limits. Using section 179 where the state conforms can reduce state tax as well as federal.
Consider recapture if property is sold or business use drops to 50% or less, and whether accelerating deductions is worth more now than in later years at potentially higher rates.