Quick Answer
No, bonus depreciation is 60% in 2026, continuing its phase-down from 100%. However, the new Section 199A simplified depreciation election often provides better results, allowing 100% first-year deductions on equipment up to $15,000 per item without the complexity of bonus depreciation calculations.
Best Answer
Priya Sharma, Small Business Tax Analyst
Best for high-earning freelancers who make large equipment purchases and need to understand all depreciation options
Bonus depreciation phase-down schedule
Bonus depreciation continues its scheduled reduction in 2026. Here's the complete phase-down:
So in 2026, you can only deduct 60% of qualifying equipment costs in the first year using bonus depreciation, with the remaining 40% depreciated over the asset's normal recovery period.
Example: $25,000 professional camera system
Let's compare your options for a $25,000 camera system purchased in 2026:
Option 1: Bonus Depreciation (60%)
Option 2: Section 179
Option 3: Regular MACRS depreciation
When bonus depreciation still makes sense
Bonus depreciation remains valuable in specific situations:
Large equipment purchases over Section 179 limits:
If you exceed the $1.16 million Section 179 limit, bonus depreciation provides 60% immediate relief on the excess.
Used equipment:
Section 199A simplified depreciation only applies to new property. For qualifying used equipment, bonus depreciation may be your best first-year option.
Real estate improvements:
Certain qualified improvement property may still qualify for bonus depreciation when other elections don't apply.
Comparison of all 2026 options
Strategic considerations for high earners
Equipment bundling: Break large systems into separate components under $15,000 each to maximize Section 199A benefits.
Example: $45,000 video production setup
Timing optimization: In high-income years, accelerate equipment purchases. In lower-income years, consider whether 60% bonus depreciation provides adequate tax relief.
Cash flow management: 60% immediate deduction still provides significant cash flow benefits compared to regular depreciation, even if less than previous years.
Mixed-use property complications
Bonus depreciation calculations become complex with mixed business/personal use:
Example: $20,000 vehicle used 70% for business
What you should do
1. Evaluate all options for each equipment purchase over $2,500
2. Consider Section 199A first for items under $15,000
3. Use Section 179 for larger items when under the annual limit
4. Apply bonus depreciation for used equipment or amounts over Section 179 limits
5. Track mixed-use percentages carefully for accurate calculations
6. Plan purchase timing around your income and tax situation
Key takeaway: While bonus depreciation dropped to 60% in 2026, the new Section 199A election often provides superior results with 100% first-year deductions and less complexity for most freelancer equipment purchases.
*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 is 60% in 2026, but the new Section 199A election provides 100% deductions with less complexity for most freelancer equipment under $15,000 per item.
Bonus depreciation percentage by year and comparison with other methods
| Year | Bonus Depreciation % | Section 199A (New) | Section 179 | Regular MACRS |
|---|---|---|---|---|
| 2023 | 80% | Not available | 100% | ~14-20% |
| 2024 | 80% | Not available | 100% | ~14-20% |
| 2025 | 60% | Not available | 100% | ~14-20% |
| 2026 | 60% | 100% (≤$15K) | 100% | ~14-20% |
| 2027 | 40% | 100% (≤$15K) | 100% | ~14-20% |
More Perspectives
James Okafor, Self-Employment Tax Specialist
Best for consultants who need to understand depreciation options for client-specific equipment and project-based purchases
Project-specific equipment considerations
As a consultant, you often purchase equipment for specific client projects or engagements. The 60% bonus depreciation rate affects how you plan these investments:
Short-term projects: With only 60% first-year relief, consider whether equipment purchases make sense for projects lasting less than a year. You might be better served renting or leasing.
Multi-year engagements: The reduced bonus depreciation still provides meaningful tax relief for equipment you'll use across multiple years.
Client reimbursement scenarios
When clients reimburse equipment purchases, bonus depreciation interactions become complex:
Full reimbursement: If a client fully reimburses equipment costs, you cannot claim any depreciation deduction.
Partial reimbursement: You can apply bonus depreciation to the non-reimbursed portion.
Example: $10,000 laptop, client reimburses $6,000
Technology refresh cycles
The lower bonus depreciation rate affects technology upgrade timing:
2-3 year refresh cycle: 60% immediate deduction may still justify regular upgrades
4+ year refresh cycle: Consider whether Section 179 or Section 199A provide better alternatives
Key takeaway: Consultants should evaluate the 60% bonus depreciation rate against project timelines and client reimbursement policies, often finding Section 199A or Section 179 more advantageous.
Key Takeaway: The 60% rate requires consultants to more carefully evaluate equipment purchases against project timelines, with Section 199A often providing better results for consulting equipment.
James Okafor, Self-Employment Tax Specialist
Best for full-time freelancers who want to understand how the reduced bonus depreciation affects their equipment purchase strategies
Impact on typical freelancer equipment
For most freelancer equipment purchases, the reduction from 80% to 60% bonus depreciation is less impactful than it initially appears because of the new Section 199A option:
Computers, cameras, software under $15,000: Section 199A provides 100% deduction, better than 60% bonus depreciation.
Used equipment: Bonus depreciation may still be your best option since Section 199A requires new property.
Large purchases over $15,000: This is where the reduction to 60% has real impact.
Practical example: Freelance photographer
Equipment purchased in 2026:
Strategy: Combine elections to optimize your overall tax position.
Planning around the phase-down
Since bonus depreciation continues declining (40% in 2027, 20% in 2028, 0% in 2029), consider:
Key takeaway: The 60% bonus depreciation rate matters less for typical freelancer equipment thanks to Section 199A, but affects strategy for used equipment and purchases over $15,000.
Key Takeaway: Most freelancers benefit more from Section 199A than the reduced 60% bonus depreciation rate, except for used equipment or purchases over $15,000 per item.
Sources
- IRS Publication 946 — How To Depreciate Property
- IRC Section 168(k) — Accelerated Cost Recovery System and Bonus Depreciation
- IRS Revenue Procedure 2026-15 — Section 199A Simplified Depreciation Election
Related Questions
Reviewed by Priya Sharma, Small Business Tax Analyst 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.