MACRS 5-Year Property — Depreciation Schedule 2025 & 2026

What qualifies as 5-Year property?

• Automobiles, taxis, and light general-purpose trucks
• Computers and peripheral equipment (laptops, servers, monitors)
• Office machines (copiers, scanners, printers, fax)
• Certain technology, R&D, and manufacturing equipment
• Appliances, carpets, and furniture used in rental property
• Heavy general-purpose trucks (13,000+ lbs unloaded) used in construction or trade

Source: IRS Publication 946, Table A-1. If your asset is not explicitly classified, consult Rev. Proc. 87-56 asset-class tables or default to 7-year property.

MACRS depreciation schedule — $50,000 asset

Worked example: a $50,000 property placed in service with no Section 179 and no bonus depreciation, showing the raw 5-Year MACRS schedule.

Rates from IRS Publication 946 Table A-1. Computed at build time — no hardcoded schedules.

IRS Table A-1: the full 5-year MACRS depreciation table

The complete 5-year recovery-percentage table under the General Depreciation System (GDS), half-year convention — the same percentages published in IRS Publication 946, Appendix A, Table A-1 — shown per $100,000 of depreciable basis. The method is 200% declining balance, switching to straight line, which is why year 1 shows only half of the full-year rate.

Percentages computed at build time by the same engine that powers the depreciation calculator and verified against IRS Publication 946 Table A-1. Assumes no §179 or bonus depreciation and the half-year convention. To apply a rate, multiply your remaining depreciable basis (after any §179 and bonus) by the percentage for that recovery year.

With §179 + 100% bonus depreciation

For a $50,000 asset placed in service in 2026, electing §179 expensing (up to $2,560,000) plus 100% bonus depreciation on the remaining basis.

With §179 capped at the full asset cost and 100% bonus on the rest, a 2026 purchase can be nearly fully expensed in year one — subject to business-income limitations for §179 and placed-in-service date for bonus depreciation.

Section 179 and bonus depreciation — 2025 vs 2026

Source: One Big Beautiful Bill Act (signed July 2025) and IRS Rev. Proc. 2025-32 (2026 inflation adjustments). The 100% allowance is keyed to the ACQUISITION date, not the placed-in-service date (OBBBA §70301(c)(1)): property acquired before 2025-01-20 stays on the pre-OBBBA §168(k)(6)(A) phase-down for whatever year it is placed in service — 80% (2023), 60% (2024), 40% (2025), 20% (2026), 0% from 2027.

How §179, bonus depreciation, and MACRS stack

1. Section 179 comes first. You elect a dollar amount up to $2,560,000 (2026), reduced dollar-for-dollar once total qualifying purchases exceed $4,090,000. The deduction cannot exceed your business taxable income — any excess carries forward.
2. Bonus depreciation applies to what is left. 100% of the remaining basis is deducted automatically for qualifying property acquired on or after 2025-01-20, unless you elect out for the class. Unlike §179, bonus has no dollar cap and no business-income limit — it can create a net operating loss.
3. Regular MACRS covers the remainder. Whatever basis survives §179 and bonus follows the 5-year percentage table above over 6 tax years.

Because bonus is 100% for property acquired on or after 2025-01-20, the MACRS table only governs basis you deliberately leave behind — by electing out of bonus, electing less than full §179, or hitting the business-income limit.

Half-year vs mid-quarter convention

The percentage table above assumes the half-year convention — the default, which treats every asset as placed in service at the midpoint of the year regardless of the actual date. IRS Publication 946 requires the mid-quarter convention instead when more than 40% of the aggregate depreciable basis of ALL MACRS personal property placed in service during the year goes into service in the last 3 months of the tax year.

When the test is failed, every personal-property asset placed in service that year switches to its mid-quarter table: each asset is treated as placed in service at the midpoint of its quarter, so a fourth-quarter purchase earns only 1.5 months of first-year depreciation instead of 6, while a first-quarter purchase earns 10.5 months. Two planning notes: basis you expense under §179 is excluded from the 40% test, and real property never counts toward it — so timing large Q4 equipment purchases (or covering them with §179) preserves the half-year convention for everything else.

Source: IRS Publication 946, ch. 4, "Which Convention Applies?" The mid-quarter percentage tables are Tables A-2 through A-5 in Appendix A.

GDS vs ADS for 5-year property

Everything above uses the General Depreciation System (GDS) — the default MACRS system. The Alternative Depreciation System (ADS) stretches the same basis over a longer period using straight-line only.

Autos, light trucks, and computers keep a 5-year recovery period under ADS; other 5-year assets generally use their Pub 946 Appendix B class life, which can be longer. On the $50,000 example, ADS spreads deductions evenly at about $10,000 per full year instead of front-loading them under 200% declining balance, switching to straight line.

Common mistakes and gotchas

• "Listed property" (autos, cell phones before 2018) has its own first-year caps — the standard MACRS 5-year schedule does not automatically apply.
• Section 280F luxury-auto limits override MACRS when applicable: passenger vehicles and certain SUVs have first-year bonus caps (e.g., $20,400 for 2024 passenger autos).
• Qualified property placed in service before 2025-01-20 uses the TCJA phase-down bonus rate (40% in 2025), not the OBBBA-restored 100%.
• The half-year convention assumes property is placed in service mid-year. If >40% of depreciable basis is placed in the last 3 months, the mid-quarter convention applies instead.

Frequently asked questions

MACRS asset classes compared

Run your own schedule with the MACRS depreciation calculator, and estimate the tax bill when you sell with the depreciation recapture calculator.