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60%
Bonus depreciation rate for qualified property placed in service in 2024: the last two years of meaningful bonus depreciation before the 2027 sunset; 40% remains in 2025
Source: IRC §168(k); Tax Cuts and Jobs Act 2017; IRS Publication 946
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Model the tax impact of any equipment purchase under bonus depreciation, Section 179, or regular MACRS, including multi-year depreciation schedules.
Bonus depreciation was one of the most powerful tax tools ever given to small business owners. At 100% in 2022, you could buy a $50,000 floor machine in December and deduct the entire cost in that tax year. Now at 60% in 2024 and heading toward zero, the window for meaningful bonus depreciation is closing.
This guide explains exactly how bonus depreciation works in 2024 for cleaning equipment, how it differs from Section 179, what qualifies, and how to use the remaining phase-down years strategically.
What Bonus Depreciation Is
Bonus depreciation, technically the "additional first-year depreciation deduction" under IRC §168(k), allows businesses to deduct a percentage of the cost of qualifying property in the year it's placed in service, rather than depreciating it over the MACRS recovery period.
The current phase-down schedule:
- 2022: 100%
- 2023: 80%
- 2024: 60%
- 2025: 40%
- 2026: 20%
- 2027+: 0% (absent new legislation)
For cleaning operators, this means a $40,000 commercial auto-scrubber placed in service in 2024 generates $24,000 in bonus depreciation in year one (60% × $40,000), with the remaining $16,000 depreciated over the 5-year MACRS schedule.
What Qualifies for Bonus Depreciation
Qualifying property under IRC §168(k)(2) includes:
- Depreciable property with a MACRS recovery period of 20 years or less
- Computer software not specifically excluded
- Qualified improvement property (QIP): interior improvements to nonresidential real property
For cleaning businesses, this covers virtually all equipment:
- Commercial vacuums and backpack vacuums
- Floor scrubbers, burnishers, strippers
- Carpet extractors
- Pressure washers and steam cleaners
- Company vehicles (subject to §280F luxury auto limits)
- Computer equipment, tablets, and smartphones (business use portion)
- Cleaning trailers
Used property: Unlike the original bonus depreciation rules (pre-TCJA), used property qualifies for bonus depreciation as long as it's not property the taxpayer previously used or acquired from a related party. Buying a used floor machine from another cleaning company at auction qualifies.
What doesn't qualify:
- Real property (buildings, land improvements); these have recovery periods over 20 years (except QIP)
- Property used 50% or less for business
- Vehicles subject to §280F luxury limits (still can use bonus, but limited by the annual depreciation caps)
Bonus Depreciation vs. Section 179: Key Differences
| Feature | Bonus Depreciation (§168k) | Section 179 |
|---|---|---|
| 2024 first-year rate | 60% of cost | 100% of cost (up to $1,220,000) |
| Income limitation | None: can create NOL | Cannot exceed business income |
| Asset-by-asset election | Must elect out by asset class | Choose each asset independently |
| Phase-down | Yes: decreasing to 0% by 2027 | Currently stable (legislative) |
| Used property eligible | Yes (new to taxpayer) | Yes |
| Vehicle §280F cap applies | Yes | Yes |
| Best use | Large purchases in profitable years; no income ceiling needed | Selective asset choice; profitable year with income to shelter |
How Bonus and Section 179 Stack
When you buy qualifying equipment, Section 179 is applied first, then bonus depreciation on the remaining basis, then regular MACRS on what's left.
Example: $50,000 auto-scrubber in 2024
Option A: Section 179 only (full deduction):
- §179 deduction: $50,000 (if taxable income allows)
- Remaining depreciable basis: $0
- Year 1 deduction: $50,000
Option B: Bonus depreciation only:
- Bonus depreciation (60%): $30,000
- Remaining basis: $20,000 depreciated over MACRS 5-year schedule
- Year 1 deduction: $30,000 + $20,000 × 20% = $34,000
- Total over 6 years: $50,000
Option C: §179 + bonus on remainder (rarely beneficial):
- Usually no benefit because §179 already deducts 100%
The rule of thumb: Use §179 when you have taxable income to shelter and want to pick specific assets. Use bonus depreciation when you're in a high-profit year and want to deduct as much as possible without worrying about income limits.
2024 Planning: Making the Most of 60% Bonus
With the phase-down accelerating, 2024 and 2025 represent the last meaningful bonus depreciation years. Cleaning operators planning significant equipment investments should consider front-loading those purchases while the rate is still 60% and 40%.
Equipment that makes sense to accelerate:
- Fleet vehicle replacements: vans and trucks that you'd replace in 2025–2026 anyway
- Auto-scrubbers and floor equipment reaching end of useful life
- Pressure washing rigs
- Technology investments (tablets, route optimization hardware)
Equipment that doesn't warrant rushing:
- Equipment you don't actually need yet: the business case must come first
- Small items under $5,000: the MACRS deductions over 5 years are close enough that the timing doesn't materially matter
| Equipment | Cost | Year 1: 2024 (60%) | Year 1: 2026 (20%) | Year 1: 2027 (0%) |
|---|---|---|---|---|
| Commercial auto-scrubber | $40,000 | $24,000 | $8,000 | $8,000 (MACRS only) |
| Cargo van (new) | $55,000 | $20,400 (§280F cap) | $12,400 (§280F cap) | $12,400 (§280F cap) |
| Pressure washer rig | $25,000 | $15,000 | $5,000 | $5,000 (MACRS only) |
| Industrial vacuum (×4) | $8,000 | $4,800 | $1,600 | $1,600 (MACRS only) |
The Election to Opt Out of Bonus Depreciation
You can elect to opt out of bonus depreciation for a specific class of assets (all 5-year property, for example) by attaching a written statement to your return. Once made, the election is irrevocable for that tax year.
When to opt out:
- You anticipate being in a higher tax bracket in future years: deferring deductions to higher-rate years saves more tax
- You're in a loss year and bonus depreciation has no immediate benefit
- The W-2 wage limitation for the QBI deduction is affected: in some situations, taking large depreciation deductions reduces QBI to zero, eliminating the §199A benefit
SVG Chart: Equipment Deduction Year 1 vs. Spreading
| Category | Value |
|---|---|
| Bonus 60% | $24K+($16K×20%)=$27.2K |
| MACRS | $8K |
| scale | 240 |
Frequently Asked Questions
My cleaning company lost money this year. Is bonus depreciation still worth taking?
It's still worth taking, and this is exactly where bonus depreciation separates itself from Section 179. Bonus can create or deepen a net operating loss, and that loss carries forward into the profitable years ahead, so a bad year turns into a deduction against a good one. IRC §172 caps the benefit at 80% of taxable income for NOLs arising after 2017, so expect the deduction to spread out rather than wipe a future year clean.
I put a machine into service on December 31. Do I get the full year's bonus, or is it prorated by month?
December 31 gets you the same deduction as January 1 for that tax year. The half-year convention treats all personal property as placed in service at the midpoint of the year regardless of the actual date, so a scrubber that comes off the truck in the last week of December is treated identically to one bought in spring. What matters is that it was placed in service inside the tax year, not which month.
There's talk about 100% bonus depreciation coming back. Should I wait to buy?
Multiple legislative proposals to restore or extend 100% bonus depreciation have been floated, and if one is enacted, equipment purchased after the effective date would qualify at the reinstated rate. That can genuinely change the math on a large purchase you were about to sign. Watch IRS guidance rather than headlines, since retroactive relief, if it's provided, may open the door to amending prior returns.
After I take bonus depreciation, do I still have to track what's left of the equipment's cost?
Yes, the leftover basis keeps depreciating. With 60% bonus depreciation in 2024, the remaining 40% of the equipment's cost continues down the MACRS schedule, and Form 4562 or your tax software carries that forward year to year without you doing the arithmetic. The running total matters at the end: when you sell the machine, adjusted basis (original cost minus all depreciation taken) is what determines your gain or loss.
How we built this guide
Opora editorial sources from BLS OEWS wage tables, ISSA-447 production rates, NCCI workers' compensation classifications, EPA List N, OSHA 29 CFR standards, and primary state regulatory filings. We don't recycle blog posts; we audit primary documents.
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