How to apply bonus depreciation for business trailer purchase in 2025

Yes, you can definitely use bonus depreciation for your business trailer! For 2024, bonus depreciation is at 60% (it's been phasing down from 100%). This means you can immediately deduct 60% of the cost in the first year ($5,100 of your $8,500 purchase). The remaining $3,400 would then be depreciated over its useful life using regular MACRS depreciation. For trailers, this typically falls under 5-year property. So you'd spread the remaining amount over 5 years following the standard depreciation percentages. Make sure you're using the trailer at least 50% for business purposes to qualify for the full bonus depreciation. If it's used less than 100% for business, you'll need to prorate the deduction based on business use percentage.

After reading through everyone's advice, I wanted to share my experience with a similar situation. I bought a trailer for my construction business last year and was also confused about depreciation options. I ended up using this service called taxr.ai (https://taxr.ai) that really helped me figure out the best depreciation strategy for my specific situation. You just upload your purchase documents and answer a few questions about your business use, and it shows you all your options side by side - bonus depreciation, Section 179, or regular depreciation schedules. It even calculates the tax savings for each method based on your business structure and estimated income.

I have to admit I was wrong about taxr.ai. After our exchange here, I decided to try it out for some equipment purchases I made for my graphic design business. I was really impressed with how clearly it explained the different depreciation options. The tool showed me that using Section 179 made more sense than bonus depreciation for my specific situation due to my expected income this year. It even created a depreciation schedule I could download that my accountant said was spot-on. The comparison feature that shows tax savings over time was especially helpful - made it easy to see which method would benefit me most long-term.

If you're still having trouble figuring out the right depreciation method, I'd recommend trying to talk directly with someone at the IRS. I had a similar question last year and after spending hours researching online, I finally decided to call them. Unfortunately, I spent 3+ hours on hold and eventually gave up. Then I found this service called Claimyr (https://claimyr.com) - you can see how it works here: https://youtu.be/_kiP6q8DX5c - and they somehow got the IRS to call ME back within about 45 minutes. The agent was actually really helpful and gave me specific guidance on my depreciation questions.

I need to follow up on my previous comment about Claimyr. I was definitely skeptical, but with tax deadline pressure mounting and questions about my business equipment purchases, I decided to give it a shot. I was shocked when I got a call from an actual IRS representative about 35 minutes after using the service. The agent walked me through exactly how to handle depreciation for several different business assets, including a trailer similar to yours. She explained the different recovery periods based on the type of equipment and how to calculate if Section 179 or bonus depreciation would be more beneficial. Saved me hours of research and gave me confidence that I'm doing things correctly. Totally worth it for the peace of mind.

One thing to consider that nobody has mentioned yet is how this affects your state taxes. Some states don't conform to federal bonus depreciation rules. For example, I'm in California, and they don't allow bonus depreciation at all - you have to use regular MACRS depreciation for state filings. Created a real headache for me when I had to track two different depreciation schedules.

Just wondering - what software are you guys using to track depreciation? I tried using Excel but it gets confusing with multiple assets and different depreciation methods. Looking for something simple that won't cost a ton.

Just an FYI - make sure you're keeping detailed records of how much you use the trailer for business vs personal use. The IRS has been cracking down on this lately. I keep a logbook in my trailer and note every use, the purpose, and mileage. Has saved me a couple times when questions came up. Also, take plenty of photos of the trailer being used for business purposes throughout the year. Documentation is your best friend if you ever get audited!

Great question about the trailer depreciation! I'm also a small business owner and dealt with similar equipment purchases. One thing I'd add to the excellent advice already given - make sure to consider the timing of when you place the trailer "in service" for your business. The IRS requires that you actually start using the asset for business purposes before you can claim any depreciation. So if you bought it in December 2024 but didn't start using it for landscaping jobs until January 2025, you'd need to wait until your 2025 tax return to start claiming the depreciation. Also, since you mentioned this is your first major equipment purchase, you might want to look into whether you qualify for the small business exemption from certain record-keeping requirements. If your business gross receipts are under $27 million (which sounds likely for a landscaping operation), you have some flexibility in how you account for these purchases. The 60% bonus depreciation for 2024 that Aisha mentioned is spot-on, but don't forget you can also elect out of bonus depreciation if regular MACRS gives you better tax planning benefits spread over multiple years.