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New IRS Guidance Clarifies Rules for Permanent 100% Bonus Depreciation
The IRS has released new guidance on how the permanent 100% bonus depreciation provisions, enacted as part of the One Big Beautiful Bill Act (OBBBA) in 2025, will apply beginning in the 2025 tax year. Notice 2026-11 provides important clarification on eligible property, key elections, and opportunities for taxpayers to strategically time their deductions.
Before reviewing the updates, it’s helpful to revisit the history of bonus depreciation.
A Quick Refresher: What is Bonus Depreciation?
Bonus depreciation allows businesses to immediately deduct the full cost of qualifying capital assets in the year they are placed in service, rather than recovering the cost over the asset’s useful life. This tool has long been used to encourage investment and was significantly expanded under the Tax Cuts and Jobs Act (TCJA) in 2017.
Under the TCJA, 100% bonus depreciation applied to qualified property placed in service between September 27, 2017, and December 31, 2022, with a scheduled phase-out beginning in 2023. Without legislative action, the deduction would have fully phased out by 2027.
The OBBBA reversed that course. Beginning January 19, 2025, the law reinstated and made permanent 100% first-year bonus depreciation for eligible property placed in service after that date.
Bonus depreciation remains distinct from Section 179 expensing, which also offers accelerated deductions but is subject to annual limits, income thresholds, and phase-outs. Many businesses continue to use both provisions as part of their tax planning strategy.
Key Clarifications From the IRS
Under the updated rules, taxpayers may continue to claim a full 100% deduction on most new or used tangible business assets with a recovery period of 20 years or less. This generally includes:
- Equipment
- Machinery
- Certain vehicles
- Computer and technology systems
- Furniture
- Certain leasehold improvements
To qualify, the property must be acquired and placed in service after January 19, 2025.
Confirmation of Eligible Property
The IRS reaffirmed that the definition of qualified property remains consistent with prior years. Eligible assets must:
- Be depreciable under MACRS
- Have a recovery period of 20 years or less
- Be placed in service after January 19, 2025
- Be new or used, subject to existing limitations
Notably, the updated law expands eligibility to include qualified sound recordings, which may benefit media, entertainment, and advertising businesses.
Elections that Remain Available to Taxpayers
The IRS confirmed that several elections, helpful for managing taxable income, continue to apply. Taxpayers may choose to:
- Elect a reduced first-year bonus depreciation amount (40% instead of 100%)
- Opt out of bonus depreciation for one or more classes of property
- Expense specific components of self-constructed property
- For farming and media businesses: elect bonus depreciation on certain plants or production assets
These elections can be beneficial when businesses anticipate higher future income and prefer to defer deductions rather than fully accelerating them. Elections are made on the tax return for the year the asset is placed in service and are generally irrevocable.
Special Rules for Farming and Long-Production Assets
The IRS also outlined guidance for two key categories:
Specified Plants for Farming Operations
Farmers may elect to take 100% bonus depreciation when specified plants—such as fruit trees, vines, or nut trees—are planted or grafted, rather than waiting until they begin producing income.
Long-Production-Period Property and Certain Aircraft
Taxpayers may elect a 60% bonus depreciation rate for certain assets that require an extended construction or manufacturing period. This applies for the first taxable year ending after January 19, 2025.
Planning Considerations Moving Forward
While the IRS characterizes this update as “interim guidance,” it provides meaningful direction for the upcoming filing season. With permanent 100% bonus depreciation now restored, businesses may find renewed opportunities to accelerate deductions and improve cash flow.
If you are planning capital investments, equipment purchases, or long-term construction projects, this is an ideal time to evaluate how these rules may impact your overall tax strategy. Coordinating bonus depreciation with Section 179, long-term planning, and projected income patterns can help you optimize the benefit.
HTB’s tax team is ready to help you make the most of permanent bonus depreciation. Contact us today to evaluate opportunities that support your capital planning and strengthen your long-term tax outlook.
Understanding the New Child-Focused “Trump Accounts”: What Parents Need to Know
The IRS recently issued additional guidance (IR-2025-117 and Notice 2025-68, released December 2, 2025) on a new type of retirement savings vehicle known as a Trump Account, set to become available in 2026. While many administrative questions remain, families can now begin to understand how these accounts may fit into long-term financial planning for children.
What is a Trump Account?
A Trump Account is a newly created, tax-advantaged individual retirement account (IRA) established under the One Big Beautiful Bill Act (OBBBA) and codified in Section 530A of the Internal Revenue Code. It is designed specifically for children under age 18, with the goal of helping families start retirement-focused investing early—even before the child has earned income.
Unlike traditional or Roth IRAs, no earned income is required. Parents and other eligible contributors may fund the account on the child’s behalf.
The IRS has confirmed that contributions will not be permitted until July 4, 2026.
Eligibility
A Trump Account may be opened for any child who:
- Has a Social Security number, and
- Has not reached age 18 by the end of the year the election is made.
The election to open the account is expected to be made by a parent, legal guardian, adult sibling, or grandparent using Form 4547 (currently in draft form).
Although full custodial rules have not yet been finalized, Trump Accounts are expected to operate similarly to custodial IRAs, with an adult serving as custodian until the child is legally allowed to assume control.
How do Trump Accounts Work?
Contributions
Under current guidance:
- Total contributions are capped at $5,000 per year, aggregated across all contributors.
- This limit applies whether contributions come from parents, relatives, employers, or others.
- The limit will be indexed for inflation beginning in 2028.
Exceptions to the $5,000 cap include:
- The one-time $1,000 federal pilot contribution (details below)
- Qualified contributions from governments or charities for defined beneficiary groups
Employers may contribute up to $2,500 per year to an employee’s dependent’s Trump Account. These contributions:
- Are not included in the employee’s taxable income
- Do count toward the child’s $5,000 annual limit
Employers may also allow employees to contribute via a Section 125 cafeteria plan, enabling pre-tax salary reductions into the account.
Certain governmental and charitable organizations may also make contributions for eligible populations, such as children in foster care.
Investments
Trump Accounts are restricted to broad-based U.S. equity index funds, such as those tracking the S&P 500.
Investments cannot include:
- Individual stocks
- Cryptocurrency
- Alternative investments
Withdrawals and Tax Treatment
Withdrawals are prohibited until January 1 of the year in which the child turns 18, except for limited circumstances that remain undefined.
Afterward, the account is treated much like a traditional IRA, with:
- Withdrawals taxed as ordinary income
- Early withdrawal penalties applying before age 59½ (unless an exception applies)
- IRA basis rules determining how contributions and earnings are taxed
The $1,000 Pilot Program Contribution
The highly discussed $1,000 federal seed contribution applies only to certain children.
To qualify, a child must be:
- A U.S. citizen
- Born between January 1, 2025, and December 31, 2028
- Properly enrolled using a timely Trump Account election
This contribution does not count toward the $5,000 annual limit. Children born outside the 2025–2028 window do not qualify unless Congress acts to extend the program.
How Trump Accounts Compare to Other Common Options
Many parents are already familiar with Roth IRAs, custodial Roth IRAs, and 529 plans, and may wonder how Trump Accounts fit alongside or compete with those tools.
|
Feature |
Trump Account (as of Dec. 2025) |
Custodial Roth IRA |
Roth IRA |
529 Plan |
|
Eligible Owner |
Child under 18 with social security number |
Minor with earned income |
Adult with earned income |
Anyone (beneficiary designated) |
|
Earned Income Required |
No |
Yes |
Yes |
No |
|
Annual Contribution Limit |
$5,000 |
$7,000 (2025) |
$7,000 (2025) |
High lifetime limits (state-specific) |
|
Tax Treatment |
Tax-deferred (traditional IRA rules) |
Tax-free growth if qualified |
Tax-free growth if qualified |
Tax-free for education |
|
Investment Restrictions |
U.S. equity index funds only |
Broad |
Broad |
Plan-dependent |
|
Withdrawals Before 18 |
Generally prohibited |
Contributions can be withdrawn |
N/A |
Allowed for education |
|
Federal Seed Money |
$1,000 (limited pilot) |
None |
None |
None |
The key distinction: Trump Accounts are specifically designed for long-term retirement savings—not education funding or short-term needs.
What We Don’t Know Yet
Several important elements remain unresolved pending additional IRS guidance, including:
- Whether funds can be rolled into Trump Accounts from 529 plans or other custodial arrangements
- How states will treat Trump Accounts for tax purposes
- Detailed rules for custodians and trustees
The IRS has requested public comments, and further clarification is expected throughout 2026.
What Can Parents Do Now?
Even though contributions cannot start until July 2026, families can begin preparing by:
- Reviewing eligibility for children born between 2025 and 2028
- Understanding how contribution caps and custodial rules may apply
- Meeting with a tax or financial advisor to see how a Trump Account fits into existing savings strategies
Parents already utilizing 529 plans or custodial Roth IRAs should be especially cautious about assuming a one-for-one replacement. Based on current guidance, Trump Accounts serve a separate and more restrictive purpose.
A New Tool, Still Taking Shape
The IRS’s December 2025 guidance provides meaningful clarity, but these accounts are still evolving. More information is expected in the months ahead.
For now, families should know this: Trump Accounts are coming, they may offer meaningful long-term benefits, and the landscape will continue to develop as the IRS releases additional guidance.
HTB’s tax professionals are here to help you navigate these emerging rules with clarity and confidence. Contact us today to explore how Trump Accounts may fit into your family’s long-term financial strategy and to plan with foresight as the guidance continues to develop.
Ferdie P. Genre has been honored with the 2026 Bob Easterly Award for his decades‑long commitment to strengthening and supporting the Livingston Parish community.
Bookkeeper, Controller, or CFO: Which Financial Role Does Your Growing Business Need?
As your business grows, so do your financial management needs. What starts as simple transaction recording quickly evolves into budgeting, forecasting, and strategic planning. Understanding the difference between a bookkeeper, controller, and CFO, and knowing when you need each, is one of the most important decisions a growing business can make. Getting it wrong can leave you with either too little support to manage complexity or too much overhead for where you are today.
Signs It Is Time to Get Help
Businesses typically reach an inflection point where managing finances internally is no longer sustainable. Common triggers include rapid growth that strains existing systems, increasing complexity from new locations or entities, persistent cash flow challenges, a need to raise capital, or the early stages of exit planning. When any of these arise, the right financial support can be the difference between reacting to problems and getting ahead of them. And the longer you wait, the harder it becomes to course-correct.
The Bookkeeper: Your Financial Foundation
Every business needs accurate bookkeeping from day one. Bookkeepers manage daily transactions, accounts receivable and payable, payroll, bank reconciliations, and basic financial reporting. They are the keepers of your financial record, ensuring that every dollar in and out is captured accurately and on time. Without this foundation in place, everything built on top of it, including budgeting, tax planning, and strategic planning, rests on unreliable data. No matter how sophisticated your financial leadership becomes, it is only as good as the books beneath it.
The Controller: Your Accounting Operations Manager
Where a bookkeeper records what happened, a controller helps you understand what it means. Controllers oversee the accounting function, develop and monitor budgets, analyze budget-versus-actual performance, forecast short-term cash needs, and implement internal controls and more complex accounting processes such as accrual-based accounting or expense allocation for proper margin analysis. They also play a critical role in implementing and maintaining the financial systems your business depends on. If your financial complexity is outpacing what a bookkeeper alone can handle, a controller brings the analytical depth and operational oversight to keep you on track.
The CFO: Your Strategic Financial Leader
A CFO operates at the highest level, focused on the long-term financial direction of your business. Working closely with ownership and senior leadership, a CFO develops financial strategy, optimizes capital structure, leads fundraising efforts, and manages investor and lender relationships. They use financial modeling and forecasting to guide decision-making, identify risk, and evaluate major opportunities. CFO-level expertise becomes essential at strategic inflection points: rapid scaling, a capital raise, a significant acquisition, or planning for a future business sale. At these moments, having the right financial leadership in place is not optional.
Choosing the Right Level of Support
Think of these roles as layers, not alternatives. Bookkeepers provide the reliable data that controllers analyze, and controllers produce the insights that CFOs use to drive strategy. Each layer builds on the one beneath it, which is why gaps in the foundation create problems all the way up. Most businesses need solid bookkeeping from the start, with controller and CFO services added as complexity and strategic demands grow.
For many growing businesses, outsourced financial services offer the most practical path forward. Rather than committing to full-time salaries, benefits, and overhead for roles you may only need part-time, outsourcing gives you access to bookkeeper, controller, and CFO-level expertise in a structure that scales with your business. It also means you are drawing on professionals who have worked across industries and business situations, bringing perspective and experience that a single in-house hire rarely can match.
How HTB Can Help
HTB’s Outsourced Accounting Services, also known as Client Accounting and Advisory Services (CAAS), provide the full spectrum of financial management support, from foundational bookkeeping to controller oversight to strategic CFO advisory, tailored to where your business is today and where you want it to go. To learn how we can help you build the right financial management structure, contact us today.