Depreciation Calculator (MACRS)
Calculate annual depreciation deductions using the Modified Accelerated Cost Recovery System (MACRS), the most common method for business assets.
Calculate Depreciation
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How It Works
MACRS spreads asset costs over predefined recovery periods using IRS tables.
Common Recovery Periods
| Period | Examples |
|---|---|
| 5-Year | Computers, vehicles, office equipment, copiers |
| 7-Year | Office furniture, machinery, most equipment |
| 15-Year | Land improvements (parking lots, landscaping) |
| 27.5-Year | Residential rental property (buildings only) |
| 39-Year | Commercial buildings (non-residential) |
Half-Year Convention
Most personal property uses the half-year convention—assets are treated as placed in service at mid-year. This means you get half a year's depreciation in the first and last years.
Frequently Asked Questions
MACRS vs Section 179?
Section 179 deducts the full cost in year one. MACRS spreads it over
multiple years. You can often use both together—Section 179 first, then depreciate any
remaining basis.
What about bonus depreciation?
Bonus depreciation allows immediate expensing of a percentage
(currently phasing down from 100%). Applied after Section 179 and before regular MACRS.
What if I sell the asset early?
You may need to recapture depreciation as ordinary income
(depreciation recapture). The rules differ for personal property vs real estate.
Can I use straight-line instead?
Yes, you can elect straight-line depreciation over the same or
longer recovery periods. This may be beneficial if you expect higher income in future years.
What's the mid-quarter convention?
Required when more than 40% of property is placed in service in the
last quarter. Calculates depreciation based on quarter placed in service rather than
mid-year.
How do I depreciate a vehicle?
Vehicles are 5-year property but have annual depreciation limits
(luxury auto limits). Heavy vehicles over 6,000 lbs GVWR have different rules—often more
favorable.