For manufacturers investing in equipment, buildings, or energy efficiency, understanding how bonus depreciation and the Section 179D deduction work can dramatically improve your tax position. These tools not only lower your tax burden but also enhance cash flow for capital projects.
Reminder: The Revenue Task Force FAQ covers related credits for equipment and building upgrades — see your answers at revenuetaskforce.com/faq/.
1) 100% Bonus Depreciation — What It Means
Under current law, businesses can fully expense qualifying property in the year it’s placed into service, rather than depreciating it over many years.
This accelerates deductions and generally lowers taxable income for the current year.
2) Section 179D — Energy Efficient Building Deduction
The Section 179D deduction rewards energy-efficient commercial building improvements that achieve measurable savings (e.g., 25% reduction in energy).
This deduction applies to lighting, HVAC, and building systems that meet defined performance standards.
FAQ tie-in: See “energy efficiency and equipment incentives” for a related question on your FAQ page.
3) Planning Tips for CFOs
• Coordinate bonus depreciation planning with capital budgeting
• Time your energy-efficient projects to maximize available deductions
• Review IRS guidance on qualification and documentation
Bonus depreciation and 179D are powerful tools for manufacturers. When used together with other tax credits discussed in your FAQ page, they elevate your cost-savings strategy and support long-term planning.