Depreciation Calculator
Calculate MACRS depreciation schedules for business assets. See year-by-year deductions with Section 179 expensing and bonus depreciation options.
First-Year Deduction
$20,000
| Asset Cost | $100,000 |
| Depreciable Basis (MACRS) | $100,000 |
| Total Year 1 Deduction | $20,000 |
| Year | Rate | Depreciation | Accumulated | Book Value |
|---|---|---|---|---|
| 1 | 20.00% | $20,000 | $20,000 | $80,000 |
| 2 | 32.00% | $32,000 | $52,000 | $48,000 |
| 3 | 19.20% | $19,200 | $71,200 | $28,800 |
| 4 | 11.52% | $11,520 | $82,720 | $17,280 |
| 5 | 11.52% | $11,520 | $94,240 | $5,760 |
| 6 | 5.76% | $5,760 | $100,000 | $0 |
Based on IRS MACRS GDS depreciation tables (Publication 946). Section 179 limit is $1,220,000 for 2025. Bonus depreciation phases down: 2024 (60%), 2025 (40%), 2026 (20%). Real property (27.5/39-year) uses straight-line with a simplified half-year first/last-year approximation; actual IRS deduction uses mid-month convention based on when placed in service.
Frequently Asked Questions
What is MACRS depreciation?
MACRS (Modified Accelerated Cost Recovery System) is the IRS method for depreciating business assets. It uses predetermined rates that are accelerated in the early years, giving you larger deductions sooner. Assets are assigned to recovery periods (3, 5, 7, 10, 15, 20, 27.5, or 39 years) based on their type.
What is Section 179?
Section 179 allows you to deduct the full cost of qualifying business equipment in the year it's placed in service, up to $1,220,000 for 2025. This is instead of depreciating the cost over several years. It applies to tangible personal property (equipment, vehicles, software) but not to real property.
What is bonus depreciation?
Bonus depreciation allows an additional first-year deduction on qualifying assets. Under the Tax Cuts and Jobs Act, bonus depreciation has been phasing down: 80% in 2023, 60% in 2024, 40% in 2025, 20% in 2026, and 0% after 2026. It applies after Section 179 and before regular MACRS depreciation.
What asset class should I use?
Common classifications: 5-year for vehicles, computers, and office equipment; 7-year for office furniture, fixtures, and most machinery; 27.5-year for residential rental buildings; 39-year for commercial/office buildings. See IRS Publication 946 for the complete list.
Sources
Editorial standards
How this page is maintained
USTax Tools updates calculator assumptions and page copy against official source material. We publish for general educational use, not individualized tax advice.
Last reviewed
March 2026
Coverage
2025 depreciation rules
Primary sources
IRS Publication 946 and Section 179 guidance