100% Bonus Depreciation Featured in New Tax Bill

tax relief concept on a paper tablet, new bonus depreciation bill

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Here’s news for small business owners: In mid-January 2024, the House and Means Committee moved H.R. 7024 – Tax Relief for American Families and Workers Act of 20241 to the House floor for an upcoming vote. This is news for small business owners in the U.S. because the Bill includes 100% bonus depreciation and an expansion of the small business expensing cap to $1.29 million from the current limit of $1 million that has been in place since 20172. The Bill also includes research and development expensing.3

Although the House needs to vote on H.R. 7024, Balboa Capital thinks it is essential for business owners to become familiar with it. If enacted, H.R. 7024 will have several positive implications for businesses in all industries nationwide. So, we compiled the information you need to know in this blog post, specifically as it relates to bonus depreciation.

Introduction of H.R. 7024.

H.R. 7024 – Tax Relief for American Families and Workers Act of 2024 was introduced on January 17, 2024, by House Ways and Means Committee Chairman Jason Smith (R-Mo.) and Senate Finance Committee Chairman Ron Wyden (D-Ore.).4 The main goals of H.R. 7024 are to provide much-needed support to small businesses and working families nationwide and to stimulate economic growth.

Proposed bonus depreciation limit increase.

As mentioned, H.R. 7024 includes provisions supporting small businesses and fueling economic growth. If enacted, the Bill would increase bonus depreciation to 100% through 2025, up from the current limit of 60%. Furthermore, the Bill would be retroactive and extend bonus depreciation for eligible assets and property purchased and placed into business use after December 31, 2022, until January 1, 2026.5

Bonus depreciation is a first-year depreciation allowance that enables businesses to accelerate the depreciation of certain qualifying assets, providing significant tax deductions in the process. Let us use a construction company as an example. The company’s owner purchased $300,000 worth of qualifying heavy equipment. Currently, 60% of the purchase price ($180,000) can be depreciated in year one rather than being expensed over its useful life. However, if H.R. 7024 is enacted, the entire $300,000 can be depreciated in year one.

If you plan to invest in capital equipment in 2024, an increase in bonus depreciation from 60% to 100% will allow for more significant tax savings.

Bonus depreciation works with new and used assets.

Bonus depreciation is available for many new and used assets and property, also referred to as “equipment.” This includes machinery, vehicles, technology, computers, printers, furniture, and off-the-shelf software. The list of qualifying assets and property is subject to change, so it is recommended that you talk to an accountant or business attorney prior to making a purchase.

Next, bonus depreciation is an excellent option if you purchase or finance eligible assets exceeding the 2024 Section 179 deduction limit. If this is your situation, you will need to elect the Section 179 deduction first, and bonus depreciation can be taken for the amount surpassing the Section 179 limit.

Other provisions in Bill H.R. 7024.

The proposed bonus depreciation increase from 60% to 100% is just one of many provisions in Bill H.R. 7024 that, if enacted, can benefit your business. Here are some of the other business-friendly provisions:

  • To increase the limit on how much a taxpayer may expense the cost of qualifying depreciable assets under Section 179 to $1.29 million and increase the phaseout threshold amount to $3.22 million, providing the assets qualify for the Section 179 deduction and are acquired and placed into service in the taxable year.6
  • To delay the date when taxpayers need to start deducting their domestic research or experimental costs over a five-year time frame until taxable years commencing after December 31, 2025. This would replace the need to amortize said costs.7

To add back the allowance for depreciation, amortization, and depletion to taxable years beginning after December 31, 2023 (and, if elected, for taxable years beginning after December 31, 2021), and before January 1, 2026. if elected, this would provide more tax deductions to business owners.8


As of this blog post published on January 26, 2024, H.R. 7024 – Tax Relief for American Families and Workers Act of 2024 has not been signed into law, and any input and recommendations from members of Congress and President Biden can result in changes to the Bill. That said, we hope this blog article provided you with more insight into H.R. 7024 and how it can benefit your business if the Bill passes. We will provide a timely update to the information in this blog article once a final decision regarding H.R. 7024 is made, so check back every few days.


  • 1 – https://www.congress.gov/bill/118th-congress/house-bill/7024
  • 2, 3 – https://www.thinkadvisor.com/2024/01/16/new-tax-bill-includes-100-bonus-depreciation/
  • 4, 5 – https://www.proskauertaxtalks.com/2024/01/tax-relief-for-american-families-and-workers-act-of-2024/
  • 6, 7, 8 -https://www.finance.senate.gov/imo/media/doc/the_tax_relief_for_american_families_and_workers_act_of_2024_technical_summary.pdf

Balboa Capital, a Division of Ameris Bank, is not affiliated with nor endorses the U.S. Congress, ThinkAdvisor, Proskauer, or the U.S. Senate. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.