Depreciation Calculator

How to use this depreciation calculator

Pick a method, enter what the asset cost and when you started using it, and the calculator builds a full depreciation schedule with the deduction, accumulated depreciation and remaining book value for every year.

• MACRS (tax) — the method the IRS requires for most business property placed in service after 1986. Choose the property class; salvage value and useful life don’t apply. Add a Section 179 election or bonus depreciation to see how much you can write off in year one.
• Straight-line, double-declining balance and sum-of-the-years’-digits — book (financial statement) methods. Enter salvage value and useful life. The first year is prorated by the month the asset was placed in service.

Enter a business-use percentage below 100% for mixed-use assets, such as a vehicle you also drive personally. The schedule below the calculator updates live and prints cleanly with the “Print / save PDF” button.

Depreciation methods and formulas

Straight-line depreciation

The simplest method spreads the cost evenly over the asset’s useful life.

A $50,000 machine with a $5,000 salvage value and a 5-year life depreciates $9,000 a year. If it’s placed in service in March, year one gets 10/12 of that and the remaining 2/12 falls in a sixth calendar year.

Double-declining balance (DDB)

An accelerated method that applies twice the straight-line rate to the remaining book value, so the deduction is largest in the early years.

Sum-of-the-years’-digits (SYD)

Another accelerated method. For a 5-year asset the digits add to 15 (5+4+3+2+1), so year one takes 5/15 of the depreciable cost, year two 4/15, and so on.

MACRS depreciation explained

The Modified Accelerated Cost Recovery System is the tax depreciation system for most US business property. Under the General Depreciation System (GDS), personal property in the 3-, 5-, 7- and 10-year classes uses 200% declining balance switching to straight-line; 15- and 20-year property uses 150% declining balance; and real property uses straight-line. Salvage value is always zero.

Conventions decide how much depreciation you get in the first year:

• Half-year — treats personal property as placed in service at mid-year, whatever the actual month. That’s why a 5-year asset is depreciated over six tax years.
• Mid-quarter — required when more than 40% of the year’s depreciable personal property (excluding real property and amounts expensed) is placed in service in the last three months. Each asset is treated as placed in service at the middle of its quarter.
• Mid-month — used for residential rental (27.5-year) and nonresidential real property (39-year). The asset is treated as placed in service in the middle of its month.

MACRS percentage table (half-year convention)

These are the IRS Publication 946 Table A-1 rates the calculator uses. Multiply the rate by the asset’s depreciable basis (after any Section 179 and bonus).

Residential rental property is recovered over 27.5 years and nonresidential real property over 39 years, straight-line with the mid-month convention: a full year is 3.636% (27.5-year) or 2.564% (39-year), and the first year is prorated by month.

Worked example: $50,000 of equipment

A business buys $50,000 of computers and office equipment (5-year property) and places it in service in March 2026. It’s the only property placed in service that year, so the half-year convention applies.

With 100% bonus depreciation (the equipment was acquired after January 19, 2025), the entire $50,000 is deducted in 2026. At a 24% marginal rate that’s about $12,000 of federal income tax saved in the first year instead of $2,400.

Section 179 and bonus depreciation in 2026

Two provisions let businesses deduct much or all of an asset’s cost in the year it’s placed in service instead of over its recovery period. The One Big Beautiful Bill Act (OBBBA) expanded both.

• Section 179 is an election to expense qualifying property — equipment, off-the-shelf software, qualified improvement property and certain roof, HVAC, fire-protection and security improvements to nonresidential buildings. The limit drops dollar-for-dollar once total qualifying purchases exceed the phase-out threshold, and the deduction can’t exceed your business taxable income (excess carries forward). SUVs over 6,000 lbs are capped at a lower Section 179 amount.
• Bonus depreciation applies automatically to new and used property with a recovery period of 20 years or less unless you elect out by class. It isn’t limited by business income, so it can create a loss. OBBBA permanently restored 100% bonus depreciation for property acquired after January 19, 2025.
• Order: Section 179 comes first, then bonus depreciation on what’s left, then regular MACRS on any remaining basis — the same order this calculator follows.

Book depreciation vs tax depreciation

Many businesses keep two sets of numbers. Financial statements often use straight-line over an estimated useful life with a salvage value, while the tax return uses MACRS, Section 179 and bonus depreciation to lower taxable income sooner. The difference creates a temporary “book-tax difference” that reverses over the asset’s life. Accelerating depreciation doesn’t change the total you deduct — it changes when you deduct it, and when you sell, depreciation you claimed is generally recaptured as ordinary income (personal property) or taxed at up to 25% (real property).

Related tools and guides

A home office used in your business is depreciated as 39-year property — the home office deduction calculator handles that for you. Vehicles can use the standard mileage rate instead of depreciation; compare both with the mileage deduction calculator. To see how a big first-year deduction changes your tax bill, plug it into the 1099 tax calculator or the S corp tax savings calculator, and adjust your quarterly estimated taxes (our quarterly taxes guide explains the rules).