Bonus depreciation is another deduction (outside of Section 179) to deduct 100% of equipment in the first year of service. Any business can leverage the 100% bonus depreciation (in the year it’s put into service) that applies to new equipment only. However, bonus depreciation is not limited to your taxable income. You can deduct any amount of bonus depreciation, and if the deduction creates (or increases) a net operating loss, you can carry that amount back to offset the previous year’s income and also carry any unused loss forward to deduct against future income. Both Section 179 and Bonus Depreciation are available for leased equipment.