Applying the One Big Beautiful Bill changes to Depreciation in ProSeries

Table of contents:

What's new for tax year 2025

The One Big Beautiful Bill brings many changes to Section 179 and Special Deprecation Allowance. Here are some of the key updates:

• Qualified production property placed in service after July 4, 2025, the construction of which began after January 19, 2025, may be eligible for a 100% special depreciation allowance.
• Section 179 deduction dollar limits have been increased, including the amount for SUV's.
• For certain qualified property placed in service before January 20, 2025, a phase-down of the special depreciation allowance is in place.
• Certain qualified property placed in service after January 19, 2025 may be eligible for 100% special depreciation allowance or you can elect to take 40%.
• Domestic research and experimental expenditures may be amortized over either a 60 month, or 10-year period. Different periods apply for foreign research.

For full details, review the 4562 instructions.

To take the 100% Special Depreciation Allowance in tax year 2025:

1. Press F6 to bring up Open Forms.
2. Type DEE to highlight the Depr Entry Wks.
3. Under Economic Stimulus - Qualified Property check Yes for Qualified Property.
4. Check Yes on box 3, If qualified, and if placed in service after 1/16/25, was this property acquired after 1/19/25?
5. Check No on box 4, For post 1/19/25 property, elect bonus phasedown in place of 100% Special Depreciation Allowance.

Back to Table of Contents

To elect out of the 100% Special Depreciation Allowance in tax year 2025:

You can opt this to use the pre-One Big Beautiful Bill Act percentages (Either 40 or 60% depending on the asset) by completing the following:

1. Press F6 to bring up Open Forms.
2. Type DEE to highlight the Depr Entry Wks.
3. Under Economic Stimulus - Qualified Property check Yes for Qualified Property.
4. Check Yes on box 3, If qualified, and if placed in service after 1/16/25, was this property acquired after 1/19/25?
5. Check Yes on box 4 For post 1/19/25 property, elect bonus phasedown in place of 100% Special Depreciation Allowance.

Back to Table of Contents

To elect phasedown special depreciation allowance in tax year 2024 for fiscal year business returns:

1. Press F6 to bring up Open Forms.
2. Type IRC to highlight IRC Elections and press OK to open the Election Summary.
3. Select the QuickZoom on line 1 to open the IRC 168(k): Special Depreciation Allowance Election.
4. Scroll down to the Election under IRC section 168(k)(10) Smart Worksheet.
5. Check the box Check this box if you are electing the phasedown of 40%/60% bonus depreciation in lieu of 100% bonus depreciation.
6. Open the Asset Entry Worksheet.
7. Under Economic Stimulus - Qualified Property review the new checkboxes to pick the special depreciation allowance that applies to this asset for this client.