A MACRS depreciation calculator helps business owners and landlords determine how much they can deduct each year for assets like vehicles, computers, office furniture, and rental property. The IRS requires most business assets to be depreciated over a set recovery period using the Modified Accelerated Cost Recovery System, which front-loads deductions to maximize early tax savings.
Asset Details
Purchase price or total cost of the asset
Used for mid-month convention on real property
Your combined federal + state marginal rate
First-Year Deduction Options
2026: 40% | 2025: 60% | 2024: 60% | 2023: 80%
2026 limit: ~$1,250,000 (personal property only)
First-Year Deduction Comparison
Year-by-Year Depreciation Schedule
| Year | Rate | Deduction | Cumulative | Remaining Basis | Tax Savings |
|---|
Estimate only. This calculator uses standard MACRS tables and 2026 bonus depreciation rates. Actual depreciation may vary based on mid-quarter conventions, listed property rules, and other IRS limitations. Consult a tax professional or CPA for personalized advice.
How to Use This MACRS Depreciation Calculator
When you buy equipment, vehicles, or property for your business, you generally cannot deduct the entire cost in the year of purchase. Instead, the IRS requires you to spread the deduction over the asset's useful life using the MACRS depreciation system. This calculator builds a complete year-by-year schedule so you can plan your tax deductions and cash flow accurately.
Step 1: Enter the Asset Cost
Enter the total cost basis of your asset — this is typically the purchase price plus any sales tax, delivery charges, and installation costs. For real property, use only the building value (exclude land). The cost basis is the starting point for all depreciation calculations.
Step 2: Select the Property Class
Choose the MACRS recovery period that matches your asset type. Common classes include 5-year property for vehicles and computers, 7-year for office furniture and general equipment, 27.5-year for residential rental buildings, and 39-year for commercial buildings. The property class determines both the recovery period and the depreciation method (200% declining balance for 3-, 5-, and 7-year; 150% declining balance for 15-year; straight-line for real property).
Step 3: Consider Bonus Depreciation and Section 179
For eligible assets, you can accelerate your deductions using bonus depreciation (40% in 2026) and Section 179 expensing (up to approximately $1,250,000). Section 179 applies first and reduces the depreciable basis, then bonus depreciation is calculated on the remaining amount, and finally regular MACRS applies to whatever is left. Real property (27.5-year and 39-year) generally does not qualify for bonus depreciation or Section 179.
Step 4: Review Your Depreciation Schedule
The calculator generates a complete year-by-year table showing annual deductions, cumulative depreciation, remaining basis, and estimated tax savings at your marginal rate. Use this schedule for tax planning, budgeting quarterly estimated payments, and comparing the impact of different depreciation strategies on your cash flow.
Understanding MACRS Conventions
MACRS uses the half-year convention for personal property (3-, 5-, 7-, and 15-year assets), which treats all assets as placed in service at the midpoint of the year regardless of the actual date. For real property (27.5-year and 39-year), the mid-month convention applies — your first-year deduction depends on which month you placed the property in service. These conventions are built into the depreciation percentages this calculator uses.
Frequently Asked Questions
What is MACRS depreciation?
MACRS (Modified Accelerated Cost Recovery System) is the IRS method for depreciating business assets over their useful life. It allows you to deduct a portion of an asset's cost each year, reducing your taxable income. MACRS uses predetermined recovery periods and percentages that front-load deductions, giving you larger write-offs in the early years of ownership.
Is this depreciation calculator free to use?
Yes, this MACRS depreciation calculator is completely free with no signup or account required. All calculations run locally in your browser — your financial data is never sent to any server or stored anywhere.
What is the difference between bonus depreciation and Section 179?
Both allow accelerated first-year deductions, but they differ in key ways. Section 179 lets you deduct up to a set limit (approximately $1,250,000 in 2026) and requires the asset to be used over 50% for business. Bonus depreciation applies a percentage (40% in 2026) to the full cost with no dollar limit, but it phases down 20% each year through 2027.
How long do I depreciate residential rental property?
Residential rental property is depreciated over 27.5 years using the straight-line method, which gives you approximately 3.636% of the building's cost as a deduction each year. Only the building value is depreciable — land is not. The first and last years use a mid-month convention, so your deduction depends on which month you placed the property in service.
What property class should I use for my business asset?
Common MACRS property classes include: 5-year for vehicles, computers, and office equipment; 7-year for office furniture, appliances, and most business equipment; 15-year for land improvements like landscaping and sidewalks; 27.5-year for residential rental buildings; and 39-year for commercial buildings. The IRS Publication 946 provides the complete list of asset classifications.
Is my financial data private when using this tool?
Absolutely. All calculations run entirely in your browser using JavaScript. No asset costs, depreciation schedules, or financial data are ever sent to any server. You can disconnect from the internet and the calculator will still work perfectly. Your information stays completely private on your device.
Can I use bonus depreciation and Section 179 together?
Yes, you can combine both in the same tax year. Section 179 is applied first, reducing the asset's depreciable basis. Then bonus depreciation is calculated on the remaining basis. Finally, regular MACRS depreciation applies to whatever cost basis is left. This combination can significantly reduce or even eliminate the depreciable basis in the first year.
What is the bonus depreciation percentage for 2026?
For assets placed in service in 2026, the bonus depreciation rate is 40%. This is part of the phase-down from the Tax Cuts and Jobs Act: it was 100% through 2022, then dropped 20% each year — 80% in 2023, 60% in 2024, 40% in 2025 was corrected to 60% in 2025, 40% in 2026, and 20% in 2027. After 2027, bonus depreciation expires unless Congress extends it.