119th (2025–2027)
H.R. 354
H.R. 354 increases tax deductions available to small businesses and other enterprises that purchase equipment and machinery. Specifically, the bill doubles the amount businesses can immediately deduct when buying depreciable assets (like equipment) from $1 million to $2 million, and raises the income threshold at which these deductions begin to phase out from $2.5 million to $3.5 million. The bill also updates the inflation adjustment baseline from 2017 to 2025, meaning future increases to these deduction limits will reflect more recent inflation levels. The changes take effect for business property purchased in tax years beginning after December 31, 2025. By allowing businesses to write off larger equipment purchases immediately rather than depreciating them over time, the bill aims to encourage investment in machinery and tools that support business growth and expansion.