Excel Depreciation Schedule for Bonus Depreciation 2026

Excel Depreciation Schedule for Bonus Depreciation: 2026 OBBBA Rules

Building an accurate Excel depreciation schedule for bonus depreciation is now the single most important spreadsheet in a small business’s tax file. With 100% bonus depreciation permanent under the One Big Beautiful Bill Act and California still refusing to conform, Inland Empire business owners who bought equipment, vehicles, or leasehold improvements in 2026 need a template that tracks both numbers correctly before their extended business tax return is due.

An Excel depreciation schedule for bonus depreciation tracks each asset’s cost, placed-in-service date, and the 100% first-year write-off allowed under IRC §168(k), then separately tracks California’s non-conforming depreciation so your books and tax return match. As of July 2026, OBBBA makes 100% bonus depreciation permanent for qualifying property placed in service after January 19, 2025 — but California still requires its own MACRS-only column.

⚠️ Extended S-Corp & Partnership Returns Due in 67 Days

Form 1120-S and Form 1065 returns on extension — plus Q3 federal and CA estimated tax payments — are due September 15, 2026. Your bonus depreciation elections must be finalized on that return; missing it risks a $235/shareholder/month penalty under §6699 and §6698.

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What Is an Excel Depreciation Schedule for Bonus Depreciation Under OBBBA?

Written and reviewed by Adham Abadier, CPA — a California Board of Accountancy licensed Certified Public Accountant (License #158599) and founder of Catalyst CPA Corporation. Bonus depreciation lets a business deduct the entire cost of qualifying equipment in the year it’s placed in service, rather than spreading the deduction over 5, 7, or 15 years. The One Big Beautiful Bill Act (P.L. 119-21), signed July 4, 2025, restored the rate to 100% permanently for property acquired and placed in service after January 19, 2025 (per IRS Notice 2026-11). Before OBBBA, the TCJA phase-down was scheduled to drop bonus depreciation to 40% in 2025, 20% in 2026, and 0% by 2027.

100% Rate Restored, No More Phase-Down

Qualifying property — generally assets with a recovery period of 20 years or less, such as machinery, computers, land improvements, and certain building components — now gets full first-year expensing indefinitely. This applies whether the property is new or used, as long as it’s new to the taxpayer claiming the deduction.

The Placed-in-Service Rule That Trips Up Excel Trackers

The single most common tracking error we see: businesses record the PURCHASE date in their Excel depreciation schedule instead of the PLACED-IN-SERVICE date. Property acquired in December 2025 but not installed and operational until January 2026 must be dated by when it’s actually in use — not when the invoice was signed. Getting this column wrong misstates which tax year gets the deduction and can trigger an amended return.

“The businesses that get audited over depreciation almost never have a fraud problem — they have a spreadsheet problem. Their Excel file shows one number, their tax return shows another, and nobody can explain why. Build the placed-in-service date and the California add-back column into the template from day one, and 90% of depreciation headaches disappear.”

How to Build an Excel Depreciation Schedule for Bonus Depreciation in 2026

A working CPA-reviewed tax planning process starts with a clean Excel depreciation schedule for bonus depreciation that tracks both the federal write-off and California’s disallowed portion side by side. Here’s the column structure we build for Inland Empire clients:

Required Columns for an Excel Depreciation Schedule for Bonus Depreciation

1. Asset description and vendor
2. Purchase date vs. placed-in-service date (two separate columns)
3. Total cost basis
4. MACRS property class (5-year, 7-year, 15-year, etc.)
5. Section 179 election amount (if any)
6. Federal bonus depreciation amount (typically 100% of remaining basis)
7. Federal MACRS depreciation for later years (usually $0 in year one if bonus applied)
8. California MACRS-only depreciation (no bonus allowed)
9. California add-back / adjustment column (federal deduction minus CA-allowed deduction)

Formulas That Power Your Excel Depreciation Schedule for Bonus Depreciation

For the CA-only column, use Excel’s built-in =VDB() or a MACRS percentage table lookup with =VLOOKUP() against IRS Publication 946’s Table A-1 percentages. For the federal bonus column, the formula is simpler: if the placed-in-service date falls after January 19, 2025, and Section 179 wasn’t fully applied, the bonus depreciation cell equals cost basis minus any §179 already claimed — full stop.

Building a depreciation spreadsheet that reconciles federal and California numbers by hand is where most self-filed returns go wrong. If your Excel file doesn’t match your tax software’s fixed asset module, Adham can review it line by line before your extended return is due.
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Section 179 vs. Bonus Depreciation: Which to Elect First?

The IRS requires a specific order: Section 179 is elected first, then bonus depreciation applies to remaining basis, then standard MACRS covers anything left. For 2026, the Section 179 limit is $2,560,000, phasing out dollar-for-dollar above $4,090,000 in total qualifying purchases (per IRS Publication 946). Since bonus depreciation is now a permanent 100%, many small businesses skip Section 179 entirely and rely on bonus depreciation alone — but §179 still matters for California, which caps its own deduction at $25,000.

When Section 179 Still Makes Sense

If taxable income is limited (Section 179 can’t create a loss, but bonus depreciation can), or if the business wants a smaller, more predictable California-conforming deduction, electing some Section 179 before bonus depreciation gives more control over the final number on both returns.

California Nonconformity: Fixing Your Excel Depreciation Schedule for Bonus Depreciation

California’s specified date of conformity to the Internal Revenue Code moved to January 1, 2025 — but the state has never conformed to bonus depreciation under §168(k), per the California Franchise Tax Board’s conformity guidance. That means every dollar of federal bonus depreciation must be added back on the California return using Schedule CA (540) or Form 100, Schedule B for corporations.

Local Example: Building the Excel Depreciation Schedule for Bonus Depreciation in Moreno Valley

A Moreno Valley auto repair shop owner purchases a $85,000 diagnostic and lift system in March 2026. Federally, 100% bonus depreciation wipes out the entire $85,000 in year one. California only allows standard 7-year MACRS (14.29% in year one), so the CA-allowed deduction is just $12,147 — leaving a $72,853 addback on the CA return that the Excel schedule must isolate in its own column. If the owner is in the 32% federal bracket, that $85,000 federal deduction saves $27,200 in federal tax immediately instead of over seven years — a real cash-flow advantage for an Inland Empire small business reinvesting in equipment.

Add-Back Mechanics for the CA Return

The addback isn’t lost forever — it converts into a larger CA depreciation deduction in future years as the asset continues depreciating on the state’s slower schedule. This is exactly why a two-track Excel depreciation schedule for bonus depreciation (federal columns plus a mirrored CA-only column) prevents a business from either double-deducting or under-deducting in later years. Businesses that skip this step often need professional IRS problem resolution support to unwind years of mismatched depreciation once the FTB flags the discrepancy.

Frequently Asked Questions

What is an Excel depreciation schedule for bonus depreciation?

It’s a spreadsheet tracking each business asset’s cost, placed-in-service date, and depreciation method — including a dedicated column for the 100% federal bonus depreciation allowed under IRC §168(k) and a separate column for California’s non-conforming MACRS-only calculation.

Does California allow 100% bonus depreciation?

No. California has never conformed to federal bonus depreciation under §168(k). Businesses must add back the full bonus depreciation amount on their state return and depreciate the asset under standard MACRS for California purposes instead.

Can I use Excel instead of accounting software to track bonus depreciation?

Yes, for smaller asset counts, but the spreadsheet must reconcile exactly to your tax software’s fixed-asset module and your general ledger. Mismatches between Excel and your books are a common trigger for CPA review requests during tax season.

What property qualifies for 100% bonus depreciation in 2026?

Tangible personal property with a MACRS recovery period of 20 years or less — machinery, equipment, computers, certain land improvements, and qualified improvement property — placed in service after January 19, 2025, qualifies for the full 100% rate.

Do I have to elect Section 179 before bonus depreciation?

Yes. The IRS ordering rules require Section 179 to be applied first, followed by bonus depreciation on remaining basis, then standard MACRS depreciation on whatever basis is left after both elections.

Can I elect out of bonus depreciation?

Yes. Under §168(k)(7), a taxpayer can elect out of bonus depreciation for an entire class of qualified property placed in service during the tax year, which some businesses do to preserve future-year deductions or match California’s treatment more closely.

Does used equipment qualify for bonus depreciation?

Yes, as long as the equipment is new to the taxpayer claiming the deduction — it doesn’t need to be brand new from the manufacturer, it simply can’t have been previously used by that same business.

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Adham will personally review your fixed-asset purchases, check whether Section 179, bonus depreciation, or both apply, and flag any California addback you’re missing before your extended return is filed.

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Get Your Excel Depreciation Schedule Reviewed Before September 15

Getting an Excel depreciation schedule for bonus depreciation right the first time protects both your federal deduction and your California compliance — and it’s one of the highest-leverage reviews a CPA can do before your extended business return is due. If you’re a Moreno Valley, Riverside, or Inland Empire business owner who bought equipment, vehicles, or leasehold improvements in 2026, talk to Catalyst CPA Corporation’s tax planning team before September 15. Contact us to get your depreciation schedule reviewed.

About the Author

Last reviewed: July 10, 2026 by Adham Abadier, CPA (CA #158599).

Disclaimer: This article is for general informational purposes only and does not constitute tax, legal, or accounting advice. Tax laws, including OBBBA and California conformity rules, change frequently and applications vary by taxpayer facts. Consult Adham Abadier, CPA, or another qualified professional before making decisions based on this content. Catalyst CPA Corporation is not liable for actions taken without individualized professional consultation.