A walkthrough, end to end.
- 1
Enter the asset cost, salvage value, useful life in years, and pick a depreciation method.
- 2
The calculator returns annual depreciation, accumulated depreciation, and book value year-by-year.
- 3
Compare methods to see which best matches your accounting strategy or tax situation.
Depreciation methods
Straight-line: equal expense each year. Declining balance: higher expense in early years, declining over time. Sum-of-years-digits: front-loaded but less aggressive than declining balance. Each suits different accounting and tax purposes.
What you can do with this.
Equipment depreciation for taxes
Most US business equipment uses MACRS (a declining-balance method). 5-year property: 200% declining balance. 7-year: same. The calculator's declining-balance gives a useful approximation; consult IRS Pub 946 for exact MACRS tables.
Vehicle depreciation
Cars typically depreciate 15–25% in year 1, 10–15% in years 2–4. Use double-declining balance over 5 years for accelerated tax deduction (subject to luxury auto limits).
Real estate depreciation
Residential rental: 27.5 years straight-line. Commercial: 39 years straight-line. Land doesn't depreciate. The calculator handles the building's depreciation; track land basis separately.
Computer / tech equipment
5-year IRS class life but real economic life is often 3 years. Use 200% declining balance for tax; reflect actual useful life on internal books.
Bonus depreciation / Section 179
Section 179 allows immediate expense up to ~$1M for small businesses. Bonus depreciation phases down: 60% (2024), 40% (2025), 20% (2026), 0% (2027+). Major tax planning consideration.
Asset disposition
When you sell an asset, gain = sale price − book value. The calculator's accumulated-depreciation column tells you the current book value at any point during the asset's life.
Comparing methods
Straight-line: smoothest expense, simplest. Declining: bigger early deductions (cash flow win, time-value benefit). SOYD: middle ground. Pick based on cash flow priority and matching to actual asset utility.
Depreciation calculator 2026 — what's current
Section 179 limits update yearly with inflation. Bonus depreciation continues phasing out. Always confirm current limits with a tax professional or IRS guidance — this calculator gives the textbook math.
Frequently asked.
Tax: usually MACRS or Section 179 (US). Financial reporting: matching the asset's actual useful pattern — straight-line for steady-use assets, declining for tech/vehicles where most utility happens early.
Estimated value at the end of useful life. For tax purposes (US), often $0 or ignored. For book accounting, your best estimate of resale or scrap value.
Yes — for business assets in nearly every tax jurisdiction. Personal-use assets generally aren't depreciable. Consult a tax pro for specific scenarios.
No. Calculations run entirely in your browser.