Sourdough 2025 / 2026

OBBBA brought back 100 percent bonus depreciation

Vehicles and equipment placed in service after January 19 2025 get full year-one write-off

  1. Before July 4, 2025, bonus depreciation was shrinking each year: 60 percent in 2024, 40 percent in 2025.
  2. OBBBA (the bill Congress passed on July 4, 2025) made 100 percent bonus permanent for anything placed in service after January 19, 2025.
  3. A car or piece of equipment you started using between January 1 and January 19, 2025 is stuck with the old 40 percent rate.
  4. Bonus only counts for your federal return. California doesn't follow the federal bonus rules, so for your California 540 you depreciate the car the normal way (spread over six years instead of all in year one).
  5. Cars also hit the separate luxury-auto cap (Section 280F), which limits the bonus boost. The 100 percent rate is most useful for work vehicles that aren't cars: trucks, vans, work SUVs.

SourceIRC §168(k); OBBBA / P.L. 119-21 §70301; IRS Pub 946 Ch. 3; Cal. R&TC §17250 (no CA conformity)

Note. General information, not tax advice. Tips reflect federal law and California rules where noted, current as of May 2026. For advice specific to your situation, consult a licensed CPA or Enrolled Agent. Sourdough Tax, Inc. is not your tax advisor unless we have explicitly accepted that engagement in writing.