Depreciation Calculator Estimate asset value loss using straight-line, declining balance, SYD, or MACRS — with 2025 IRS r...

Depreciation Calculator

Estimate asset value loss using straight-line, declining balance, SYD, or MACRS — with 2025 IRS rules and tax savings insights.

Straight-Line

Declining Balance

Sum-of-Years’-Digits

MACRS (Tax)

Asset Cost ($)

Salvage Value ($)

Useful Life (Years)

Asset Cost ($)

Useful Life (Years)

Rate Multiplier 200% (Double-Declining) 150% Declining

Asset Cost ($)

Salvage Value ($)

Useful Life (Years)

Asset Cost ($)

Asset Class 3-Year: Tractors 5-Year: Vehicles, Computers 7-Year: Furniture 15-Year: Land Improvements 27.5-Year: Rental Property

Bonus Depreciation (%)

Section 179 ($)

Tax Bracket (%)

$0

Year 1 Deduction

$0

Total Depreciation

$0

End Book Value

$0

Tax Savings (Y1)

Depreciation Over Time

Depreciation Formulas

Straight-Line**:

$$ \text{Annual} = \frac{\text{Cost} - \text{Salvage}}{\text{Life}} $$

200% Declining Balance**:

$$ \text{Year 1} = \text{Cost} \times \frac{2}{\text{Life}} $$ $$ \text{Subsequent} = \text{Book Value} \times \frac{2}{\text{Life}} $$

MACRS (5-Year Example)**:

• Y1: 20.00%
• Y2: 32.00%
• Y3: 19.20%
• Y4: 11.52%
• Y5: 11.52%
• Y6: 5.76%

Example** ($50K vehicle, 5-yr, 60% bonus): • Bonus = $30,000 • MACRS Y1 = ($50K − $30K) × 20% = $4,000 • **Total Y1 deduction = $34,000** • Tax savings (24%) = **$8,160**

Depreciation Red Flags

⚠️ Avoid these costly mistakes:

• Missing bonus depreciation deadline** — must place in service by Dec 31
• Overstating Section 179** — phase-out starts at $3.13M asset purchases
• Using straight-line for tax** — MACRS gives faster write-offs
• Ignoring mid-quarter convention** — applies if >40% placed in service Q4

✅ Pro Tips**:

• Stack **Section 179 + bonus + MACRS** for max Year 1 deduction
• Use **ADS (Alternative Depreciation System)** for AMT planning
• Track assets in fixed asset software — IRS requires detailed records

2025 Depreciation Benchmarks

Asset	Cost	Y1 Deduction (MACRS+Bonus)	Tax Savings (24%)
Car	$40,000	$28,000	$6,720
Computer	$3,000	$2,100	$504
Rental Property	$250,000	$9,091	$2,182
Furniture	$10,000	$7,000	$1,680

📉 Bonus Depreciation Phase-Down**:

• 2023: 80%
• 2024: 60%
• 2025: 40%
• 2026: 20%
• 2027+: 0%

How to Use This Calculator

➡️ Straight-Line

“$50K equipment, $5K salvage, 5 yrs — annual depreciation?” ($9,000/yr)

➡️ Declining Balance

200% DB on $50K/5-yr → $20,000 (Y1), $12,000 (Y2)…

➡️ SYD

Sum = 5+4+3+2+1 = 15 → Y1: 5/15 × $45K = $15,000

➡️ MACRS (Tax)

“$50K car, 60% bonus, 24% bracket — Y1 tax savings?” ($8,160)

Note: Uses IRS Publication 946 tables. Assumes half-year convention. Bonus + Section 179 applied first, then MACRS on remaining basis.