Written by: Aaron Cutler
A recent tax bill has restored 100% bonus depreciation, which is a major win for business owners—especially those buying gas stations, car washes, and other asset-heavy operations. But what does this mean for you as an investor or operator?
What is Bonus Depreciation?
Bonus depreciation allows you to deduct the entire cost of eligible assets in the first year they are placed in service, rather than spreading those deductions over several years. For example, if you purchase a car wash or a convenience store with fuel pumps, you can write off a significant portion—or even all—of the qualifying equipment and improvements in year one. This dramatically reduces your taxable income and improves your cash flow right away.
Why This Matters for Buyers
When buying a gas station or car wash, the ability to take 100% depreciation immediately can offset much of the upfront tax burden. This benefit can make your investment far more profitable in the early years, freeing up capital for reinvestment, expansion, or debt reduction.
Other Powerful Tax Strategies to Consider
Here are additional tax strategies that can complement bonus depreciation:
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Cost Segregation Studies: Breaks down property into individual components to maximize deductions.
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Section 179 Expensing: Another method for deducting asset costs, often used alongside bonus depreciation.
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Strategic Financing: How structuring your acquisition properly can maximize tax benefits.
These tools, when combined, can significantly reduce your tax liability and improve your return on investment.
Why You Should Talk to a Tax Professional
While these strategies are powerful, they can also be complex. Every situation is different, and not all assets qualify in the same way. That’s why it’s critical to discuss these opportunities with a tax advisor who understands bonus depreciation and advanced tax planning.
If you want to learn more and take the first step toward leveraging these strategies, watch the video below:
