If you run a Florida construction or specialty contractor company ($1M–$5M in revenue), the One Big Beautiful Bill Act (OBBBA) creates a powerful, cash-flow-friendly deduction in 2025. If you convert a personal vehicle to business use, the law treats it as placed in service on the conversion date. With 100% bonus depreciation back, you may deduct up to 100% of the vehicle's fair market value (FMV) multiplied by your business-use percentage - so long as you don't opt out of bonus depreciation.

Example: Your truck's FMV is $31,000. You use it 70% for business. Your 2025 deduction could be $21,700 (31,000 × 70%).

Which vehicles qualify - and how much can you deduct?

• Heavy SUVs, pickups, and vans: Eligible for full bonus depreciation (subject to business-use % and other listed-property rules).

• Smaller passenger autos: Subject to the standard "luxury auto" caps. Even then, first-year deductions can be up to $20,200 in 2025 when the bonus applies.

Practical note: To use bonus depreciation, you'll choose the actual expense method (not the standard mileage rate).

Key rules to follow

• Basis at conversion: Your basis is fundamental, as it will determine how much can be deducted. To determine this, you'll use the lower of either FMV or adjusted basis on the date you convert to business use.

• Section 179: You cannot use Section 179 on converted property. However, importantly, bonus depreciation applies automatically unless you opt out.

• All-or-nothing by class: If you opt out of bonus depreciation, you must opt out for the entire asset class.

• Recordkeeping matters: Passenger vehicles are considered "listed property," which means extra rules apply. You must keep a contemporaneous mileage log to support the business-use percentage. Falling below 50% business use can limit methods and deductions.

Step-by-step for Florida contractors

1. Talk to your accountant or tax preparer to see if this makes sense.

2. Determine your business use and start tracking the business use of your vehicle with a contemporaneous mileage log.

3. Document the conversion date. Capture your odometer, photos, and FMV support.

4. Update insurance and policies. If the title stays in your name, ask your agent about business-use coverage; if you retitle to the company, update registrations and insurance accordingly.

5. Track business use continuously. Use a mileage app to log trips and retain receipts.

What happens when you sell?

When you dispose of the vehicle later, your basis for gain or loss depends on whether the sale results in an increase or a loss. Expect possible depreciation recapture and plan for it ahead of time.

Bottom line

For contractors across Florida, OBBBA's 100% bonus depreciation makes converting an existing personal vehicle a way to secure a significant deduction without paying additional cash. The wins are real, but so are the rules. If you plan on doing this, talk with your accountant or tax preparer to help guide you.

Don't already have an accountant or tax preparer? Feel free to schedule a call to see if we'd be a good fit for you. We specialize in helping Florida contractors, builders, and construction firms manage their accounting and optimize tax strategies.