By Zaher Fallahi, CPA, MS, MBA
Serving Los Angeles, Orange County & Clients Nationwide
Crypto Tax • International Tax • IRS Audits • Business Tax
Permanent 100% Bonus Depreciation: IRS Issues New Guidance for 2026
The IRS has released Notice 2026-11, providing updated guidance on the permanent 100% bonus depreciation created under the One, Big, Beautiful Bill (OBBBA)—a federal tax law signed by the President in early 2025. This provision represents one of the most significant business tax incentives now available to U.S. taxpayers.
Key Highlights
✔ 100% First-Year Bonus Depreciation (Permanent)
Applies to qualified property acquired after January 19, 2025.
✔ Optional Elections for Taxpayers
• Elect 40% or 60% bonus depreciation instead of 100%
• Elect bonus depreciation for specified plants
• Treat certain self-constructed components as qualified property
• Elect out for qualified sound recordings
✔ Sound Recording Productions Now Eligible
May qualify if principal recording begins in a tax year ending after July 4, 2025.
Planning Tips for Businesses
• Verify acquisition and placed-in-service dates
• Evaluate whether 40%, 60%, or 100% provides the best long-term benefit
• Update capitalization and fixed-asset policies
• Maintain proper documentation for IRS compliance
• Align depreciation elections with cash-flow strategy and tax forecasts
The IRS confirms that taxpayers may continue relying on existing bonus depreciation regulations until further guidance is released.
For additional information, review Notice 2026-11 and OBBBA updates on IRS.gov.
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