100% bonus depreciation in 2026: buying equipment is only the first step

The law restored 100% additional first-year depreciation for eligible property acquired and placed in service after January 19, 2025. That can be relevant to equipment purchases during 2026. However, the phrase “100% write-off” leaves out the eligibility and timing checks that determine whether a deduction is available.

The IRS issued Notice 2026-11 guidance on the change. The acquisition rules matter, particularly where a written binding contract or earlier purchase arrangement is involved. Do not assume every asset delivered in 2026 falls under the restored percentage.

Build an asset file, not just a receipt folder

For each significant purchase, keep the purchase agreement, invoice, payment or financing records and evidence of when the asset was ready for business use. Note the asset's purpose and whether anyone also uses it personally.

A fictional Houston fabrication shop might order a machine late in December 2026. If it is not ready and available for its intended function until January 2027, payment in December alone does not put it into service for 2026. Conversely, actual first production is not always the deciding event if the machine was already ready and available. The exact facts need review.

The IRS describes the placed-in-service standard in Publication 946.

Confirm that the property qualifies

Eligibility depends on the type of asset and the applicable rules. Certain used property can qualify, but related-party purchases and prior use can change the answer. Passenger automobiles and listed property have additional restrictions. Land is not a depreciable equipment purchase, and buying a building is not the same as buying machinery.

Businesses considering production facilities should obtain a separate analysis of the qualified production property provision. It is a different rule from ordinary equipment bonus depreciation; do not apply a headline about factory property to any commercial building.

Compare timing with the whole tax return

An immediate deduction changes the timing of cost recovery. It may also reduce deductions available in later years. The result can interact with business losses, owner-level limitations and other deductions.

Before deciding, prepare two forecasts using the same operating assumptions: one with the proposed equipment purchase and permitted depreciation, and one without the purchase. Compare cash remaining as well as projected tax. A purchase that saves some tax can still leave the business short of working capital.

Questions to bring to a planning meeting

• What property is being acquired, and from whom?
• When was the purchase legally committed?
• When will the asset be ready and available for use?
• What portion is business use?
• What prior depreciation elections affect the options?
• How do the deduction and financing change the next two years?

Tax N Tips can help connect your bookkeeping records with a tax-planning review. Book a consultation before relying on a seller's estimate of the tax benefit.

Compare this with our guide to Section 179 before choosing an equipment deduction.

Sources checked September 5, 2026.