Quick Answer
No, bonus depreciation is not 100% in 2026. It dropped to 60% for qualified property placed in service during 2026. This continues the phase-down from 100% (2017-2022) to 80% (2023-2025), with further reductions to 40% in 2027, 20% in 2028, and 0% starting in 2029.
Best Answer
James Okafor, Self-Employment Tax Specialist
Best for freelancers with substantial equipment investments who need to optimize depreciation strategies
Bonus depreciation drops to 60% in 2026
Bonus depreciation is definitively not 100% in 2026. Under the Tax Cuts and Jobs Act phase-down schedule, bonus depreciation decreased to 60% for qualified property placed in service during 2026. This represents a significant reduction from the 80% rate available in 2025.
The complete phase-down schedule:
This means freelancers have a narrowing window to take advantage of bonus depreciation before it disappears entirely.
What qualifies for the 60% bonus depreciation
Not all business equipment qualifies for bonus depreciation. The property must meet these requirements:
Qualified property includes:
Property that doesn't qualify:
Example: $100,000 equipment purchase comparison
Let's compare how a $100,000 freelance video production equipment purchase would be treated under different depreciation scenarios:
Alternative 2026 strategy using Section 179:
Instead of bonus depreciation, you could elect Section 179 for the full $100,000 immediate deduction, assuming you haven't exceeded the $1.2 million limit.
Strategic implications for high-earning freelancers
The reduction to 60% creates urgency for major equipment purchases. Here's how to optimize:
Accelerate purchases into 2026: If you're planning equipment upgrades over the next few years, purchasing in 2026 captures 60% bonus depreciation versus 40% in 2027 or 20% in 2028.
Coordinate with Section 179: For purchases under $1.2 million, Section 179 often provides better results than bonus depreciation. Use bonus depreciation as overflow when Section 179 is maximized.
Consider tax bracket timing: Higher-income freelancers might benefit from spreading large deductions across years to stay in optimal tax brackets, but the declining bonus depreciation rates complicate this strategy.
Example: Strategic planning for $300,000 equipment over 3 years
A freelance consultant needs $300,000 in equipment from 2026-2028:
Scenario 1: Spread evenly
Scenario 2: Front-load with Section 179
Tax impact for freelancer in 24% bracket:
What you should do
Evaluate your multi-year equipment needs now. If you're planning major purchases through 2028, accelerating them into 2026 captures higher depreciation rates. However, ensure the immediate deduction doesn't push you into a higher tax bracket where the benefit is reduced.
Use our freelance dashboard to model different purchase timing scenarios based on your projected income and equipment needs.
Key takeaway: Bonus depreciation dropped to 60% in 2026 and continues declining to zero by 2029, making immediate Section 179 elections or accelerated equipment purchases increasingly valuable for tax optimization.
*Sources: [IRS Publication 946](https://www.irs.gov/pub/irs-pdf/p946.pdf), [IRC Section 168(k)](https://www.law.cornell.edu/uscode/text/26/168)*
Key Takeaway: Bonus depreciation dropped to 60% in 2026 and continues declining to zero by 2029, making immediate Section 179 elections or accelerated equipment purchases increasingly valuable for tax optimization.
Bonus depreciation phase-down schedule and alternatives
| Year | Bonus Depreciation Rate | Section 179 Limit | Best Strategy for Most Freelancers |
|---|---|---|---|
| 2023-2025 | 80% | $1.16M | Section 179 for full deduction |
| 2026 | 60% | $1.2M | Section 179 for full deduction |
| 2027 | 40% | $1.24M (estimated) | Section 179 strongly preferred |
| 2028 | 20% | $1.28M (estimated) | Section 179 almost always better |
| 2029+ | 0% | Indexed annually | Section 179 only option for immediate deduction |
More Perspectives
James Okafor, Self-Employment Tax Specialist
Best for freelancers with moderate equipment needs who want to understand the practical impact
How the 60% rate affects typical freelancer purchases
For most full-time freelancers, the reduction from 80% to 60% bonus depreciation means less immediate tax relief on equipment purchases, but Section 179 often provides a better alternative anyway.
Typical freelancer equipment and 2026 impact:
In most cases, electing Section 179 instead of bonus depreciation gives you the full deduction immediately.
When bonus depreciation still makes sense:
If your total equipment purchases exceed the Section 179 limit ($1.2 million), bonus depreciation applies to the excess amount. For typical freelancers, this rarely occurs.
Planning for the phase-out
Since bonus depreciation continues declining (40% in 2027, 20% in 2028, 0% in 2029), consider timing major equipment purchases sooner rather than later if you can't use Section 179.
Key takeaway: Most freelancers should use Section 179 for immediate full deductions rather than 60% bonus depreciation in 2026, but the declining rates make equipment purchase timing increasingly important.
Key Takeaway: Most freelancers should use Section 179 for immediate full deductions rather than 60% bonus depreciation in 2026, but the declining rates make equipment purchase timing increasingly important.
Priya Sharma, Small Business Tax Analyst
Best for consultants making strategic multi-year equipment investments
Multi-year equipment planning with declining bonus depreciation
Consultants often plan equipment purchases across multiple years based on client contracts and project needs. The declining bonus depreciation rates require more strategic timing.
Key planning considerations:
1. Contract timing: If you know you'll need specific equipment for upcoming projects, purchasing in 2026 (60% bonus) beats 2027 (40% bonus)
2. Client reimbursements: Equipment purchased for specific clients may be reimbursable, affecting the net tax impact
3. Technology refresh cycles: Plan computer and technology upgrades to capture higher depreciation rates
Example for IT consultant:
Planning $75,000 in equipment over three years:
Documentation requirements increase: As bonus depreciation phases out, maintaining detailed records of equipment business use percentages becomes more critical for maximizing available deductions.
Key takeaway: Consultants should front-load equipment purchases into 2026 to capture 60% bonus depreciation while it's still available, coordinating with Section 179 elections for optimal tax benefits.
Key Takeaway: Consultants should front-load equipment purchases into 2026 to capture 60% bonus depreciation while it's still available, coordinating with Section 179 elections for optimal tax benefits.
Sources
- IRS Publication 946 — How To Depreciate Property
- IRC Section 168(k) — Accelerated Cost Recovery System - Bonus Depreciation Rules
Related Questions
Reviewed by James Okafor, Self-Employment Tax Specialist on February 28, 2026
This content is for educational purposes only and is not a substitute for professional tax advice. Consult a qualified tax professional for advice specific to your situation.