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How the 2025 "One Big Beautiful Bill" Makes 100% Bonus Depreciation Permanent — And What High-Income Earners Need to Know

Introduction

Tax law rarely hands out gifts. But the 2025 "One Big Beautiful Bill Act" (OB3) is an exception — especially for high-income professionals who want to reduce taxable income without using risky or aggressive loopholes.

With this law, 100% bonus depreciation is now permanent, restoring one of the most powerful tax incentives for business owners and investors. For anyone investing in high-value tangible assets — like machinery, vehicles, equipment, or industrial infrastructure — this opens a massive opportunity to lower tax liability while deploying capital into productive businesses.

This guide breaks down what changed, how the new rules work, and how high-W2 earners can use the law to build wealth more efficiently.

What Is 100% Bonus Depreciation?

Bonus depreciation allows businesses to immediately deduct the full cost of qualifying property in the year it's placed in service, rather than depreciating it over 5, 7, or 15+ years.

This creates:

• A huge upfront tax deduction
• Immediate reduction in taxable income
• Higher after-tax cash flow
• A stronger business case for capital-heavy industries

Bonus depreciation was originally enhanced by the 2017 Tax Cuts and Jobs Act (TCJA), which temporarily set it to 100%. It was scheduled to phase down starting in 2023 — until the 2025 law reversed that trend.

What the New Law Changes

The OB3 Act does two major things:

1. Permanently restores 100% bonus depreciation (Section 168(k))

Anything with a useful life of 20 years or less — equipment, machinery, vehicles, computers, tools, electrical gear, etc. — can be written off fully in Year 1.

2. Expands the rules with a new category: Qualified Production Property (Section 168(n))

This includes certain types of non-residential real property and facility improvements tied to production, manufacturing, or high-density industrial operations.

For investors deploying capital into data centers, high-compute racks, mining facilities, or power infrastructure, this is a huge deal.

Why High-W2 Earners Should Care

If you earn $300k+, $500k+, or even $1M+ per year, your tax planning options are limited.

You can:

• Max a 401k
• Contribute to an HSA
• Give to charity
• Fund a backdoor Roth

…but none of these meaningfully cut your taxable income.

Bonus depreciation does.

It gives high-income earners a way to:

• Start or invest in a legitimate business
• Deploy capital into assets
• Deduct the full cost of those assets in Year 1
• Potentially offset a significant portion of taxable income

Few tax strategies offer this kind of impact legally and cleanly.

What Qualifies for 100% Bonus Depreciation?

Eligible asset types include:

• Machinery and equipment
• Technological hardware
• Electrical systems
• Industrial infrastructure
• Vehicles
• High-density compute systems
• Bitcoin mining hardware
• GPU servers
• Data center equipment
• Many non-residential improvements (under 168(n))

Assets that often qualify in your industry:

• ASIC miners
• Immersion cooling tanks
• Containers
• Transformers
• Switchgear
• PDUs
• Facility electrical upgrades
• Racks, rails, shelves
• Compute clusters
• HVAC and cooling components
• Monitoring and control systems

This is why the law is a big deal for people entering mining, compute infrastructure, and digital asset hosting.

Structuring the Business Correctly

To use bonus depreciation, you must:

✓ Operate a real business
Not a passive hobby.

✓ Use assets in a trade or business
Document business purpose, invoices, deployment, and operational activity.

✓ Place the assets in service
Meaning: operational, installed, capable of generating revenue.

✓ Choose the right entity
LLCs, S-corps, partnerships, or sole proprietorships can all potentially use bonus depreciation, but high-W2 earners often need a structure that avoids passive loss limitations.

This is where a tax advisor is invaluable.

Why This Matters for Mining & Hosting

Few industries have assets that:

• Qualify for bonus depreciation
• Are easy to place in service
• Generate real revenue quickly

Mining and compute hosting check all boxes.

Imagine:

• You deploy $500k of mining or compute hardware
• You place it in service this year
• You deduct the full $500k
• You generate consistent hosting revenue or mining income
• You build long-term cash flow while reducing taxes this year

This is why sophisticated investors are doubling down on industrial compute.

Final Thoughts

100% bonus depreciation is one of the most powerful tools available to high-income earners today. With the new law making it permanent, the opportunity is long-term — but early movers still benefit from lower hardware costs, faster deployment, and stronger ROI.

If you're evaluating deploying capital into mining or compute hosting for tax benefits, structure and timing matter. Done right, the combination of bonus depreciation + hosting revenue is extraordinarily compelling.