Free calculator
Depreciation calculator
Build a depreciation schedule for your books or your tax return. Pick a method, and the calculator shows each year's charge, the formula behind it, and a schedule you can paste into Excel.
Asset
Purchase price plus costs to get it ready for use.
What you expect to sell it for at the end of its life.
Timing
Depreciation schedule
| Year | Fiscal year | Depreciation | Closing book value |
|---|---|---|---|
| 1 | FY2026 | 43,250.00 | |
| 2 | FY2027 | 34,250.00 | |
| 3 | FY2028 | 25,250.00 | |
| 4 | FY2029 | 16,250.00 | |
| 5 | FY2030 | 7,250.00 | |
| 6 | FY2031 | 5,000.00 | |
| Total | 45,000.00 | ||
The same asset under four methods
| Fiscal year | Straight-line | Double declining balance | 150% declining balance | Sum-of-the-years'-digits |
|---|---|---|---|---|
| FY2026 | 6,750.00 | 15,000.00 | 11,250.00 | 11,250.00 |
| FY2027 | 9,000.00 | 14,000.00 | 11,625.00 | 12,750.00 |
| FY2028 | 9,000.00 | 8,400.00 | 8,137.50 | 9,750.00 |
| FY2029 | 9,000.00 | 5,040.00 | 6,216.67 | 6,750.00 |
| FY2030 | 9,000.00 | 2,560.00 | 6,216.66 | 3,750.00 |
| FY2031 | 2,250.00 | – | 1,554.17 | 750.00 |
Books or taxes: which schedule you need
Book depreciation spreads an asset’s cost, less what you expect to recover at the end, over the years you expect to use it. You choose the method and estimate the life and salvage value as an accounting policy.
Tax depreciation for most business property uses the Modified Accelerated Cost Recovery System (MACRS). The IRS sets the recovery period by class of property, and Publication 946 publishes the percentage for each year. There’s no salvage value, and the first-year convention follows fixed rules.
The two usually give different numbers each year, so many businesses keep both schedules.
The book methods, with formulas
Here are three methods applied to the same asset: $10,000 cost, $1,000 salvage value, five-year useful life, a full year in the first year.
| Method | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Total |
|---|---|---|---|---|---|---|
| Straight-line | 1,800 | 1,800 | 1,800 | 1,800 | 1,800 | 9,000 |
| Double declining balance | 4,000 | 2,400 | 1,440 | 864 | 296 | 9,000 |
| Sum-of-the-years'-digits | 3,000 | 2,400 | 1,800 | 1,200 | 600 | 9,000 |
Straight-line
The same charge each year. If the asset starts partway through a year, the first year is prorated and the remainder falls in a final, extra year. The straight-line depreciation calculator walks through the monthly charge and the entry to post.
Declining balance (200% or 150%)
The rate applies to the falling book value, so charges shrink each year. Salvage value isn’t deducted first, but the charge stops when book value reaches it. The 150% version uses 1.5 ÷ life. With the switch turned on, the schedule moves to straight-line over the remaining life once that gives the larger charge.
Sum-of-the-years’-digits
Also accelerated, but with a fraction that falls by one step a year: 5/15, then 4/15, and so on.
Units of production
Ties depreciation to use, such as machine hours or miles, rather than time.
How the MACRS calculation works
The tax view uses the General Depreciation System (GDS) percentage tables in Publication 946, Appendix A. The property class sets the table and the method:
- 3-, 5-, 7- and 10-year property: 200% declining balance, switching to straight-line.
- 15- and 20-year property: 150% declining balance, switching to straight-line.
- 27.5-year residential rental and 39-year nonresidential real property: straight-line, mid-month convention.
In the publication’s words, “The MACRS percentage tables in Appendix A have the switch to the straight line method built into their rates.” The calculator multiplies your basis by each year’s percentage; the full tables are on the MACRS depreciation tables page. For a tax-only walkthrough, use the MACRS depreciation calculator, and to test how much you can expense first, the section 179 calculator.
Conventions
Under the half-year convention, you “deduct a half-year of depreciation for the first year and the last year that you depreciate the property.” The mid-quarter convention applies instead when more than 40% of the year’s depreciable bases were placed in service in the last three months of the tax year. Buildings use the mid-month convention, so the first-year rate depends on the month placed in service.
Section 179 and the special allowance
The Form 4562 instructions describe the special depreciation allowance as “an additional deduction you can take after any section 179 expense deduction,” and MACRS applies to the basis left after both. Example: $100,000 of 5-year equipment, a $20,000 section 179 deduction and a 40% special allowance.
| Section 179 deduction | $20,000 |
| Special allowance: 40% × ($100,000 − $20,000) | $32,000 |
| MACRS year 1: 20% × $48,000 | $9,600 |
| First-year deduction | $61,600 |
|---|
What the calculator leaves out
- The alternative depreciation system (ADS) and elections to use 150% declining balance or straight-line under GDS.
- Short tax years and property disposed of before the end of its recovery period.
- Passenger automobile limits and the listed-property rules, beyond a warning when business use is 50% or less.
- Whether property qualifies for section 179 or the special allowance, and the section 179 business income limit.
- State rules that differ from federal depreciation.
Check results against Publication 946 and the Form 4562 instructions for your tax year, or with a tax professional. This page is not tax advice.
Depreciation: questions
- How do you calculate straight-line depreciation?
- Subtract the salvage value from the cost and divide by the useful life in years. A $10,000 asset with a $1,000 salvage value and a five-year life depreciates $1,800 a year. If the asset is placed in service partway through the year, the first and last years get a partial charge.
- What is double declining balance depreciation?
- An accelerated method: each year's charge is the opening book value times twice the straight-line rate (2 ÷ useful life). Salvage value isn't subtracted up front, but book value can't go below it. Most schedules switch to straight-line once that gives the larger charge, which this calculator does by default.
- What's the difference between book and tax depreciation?
- Book depreciation follows your accounting policy: an estimated useful life, a salvage value and a method that matches how the asset is used up. Federal tax depreciation for most property placed in service after 1986 uses MACRS, with recovery periods, methods and conventions set by the IRS and no salvage value. The two schedules usually differ, so many businesses keep both.
- When do I have to use the mid-quarter convention?
- Publication 946 requires it when the depreciable bases of MACRS property placed in service during the last three months of the tax year are more than 40% of the total depreciable bases of all MACRS property placed in service that year. Nonresidential real property, residential rental property and a few other items are left out of the test.
- What is the section 179 limit for 2026?
- For tax years beginning in 2026, the maximum section 179 deduction is $2,560,000, reduced by the amount by which the cost of section 179 property placed in service during the year exceeds $4,090,000 (Revenue Procedure 2025-32, section 4.24). The section 179 calculator applies the limits and the business income test.
- Does the calculator include bonus depreciation?
- Yes, as the optional special depreciation allowance in the tax view. Following the Form 4562 instructions, it is figured after any section 179 deduction, and MACRS then applies to the basis that's left. It doesn't check whether the property qualifies.
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Sources
Official documents read on October 29, 2026. Vendor facts are sourced on each listing.