Depreciation Calculator
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Results
Double-declining balance (switch to straight-line): $4,000 in the first year and $9,000 in total over 5 years, leaving a book value of $1,000.
| Year | Depreciation | Accumulated | Book value |
|---|---|---|---|
| 1 | $4,000 | $4,000 | $6,000 |
| 2 | $2,400 | $6,400 | $3,600 |
| 3 | $1,440 | $7,840 | $2,160 |
| 4 | $864 | $8,704 | $1,296 |
| 5 | $296 | $9,000 | $1,000 |
Book depreciation with a full year of depreciation in the first year. For US tax returns, most business property uses MACRS instead.
How to use the depreciation calculator
- Choose a method. Straight-line suits most book accounting; declining balance and sum-of-the-years' digits front-load the expense; units of production follows usage.
- Enter the cost (including delivery and installation), the salvage value and the useful life in years.
- For units of production, enter the total units the asset should produce and the units used each year.
- For US tax, choose MACRS and the property class. The schedule uses the IRS half-year convention table.
Depreciation formulas
Declining balance = book value × factor ÷ life (factor 2 for double-declining), switching to straight-line on the remaining value when that is larger
Sum-of-the-years' digits = (cost − salvage) × remaining life ÷ (n(n + 1) ÷ 2)
Units of production = (cost − salvage) ÷ total units × units used
MACRS = basis × Table A-1 percentage for the year
Book value is cost minus accumulated depreciation, and no method takes it below the salvage value. Declining balance ignores salvage when working out the yearly charge but stops at it. MACRS ignores salvage altogether and, because of the half-year convention, spreads a 5-year asset over six tax years.
Worked example
A $10,000 machine with a $1,000 salvage value and a five-year life gives these schedules. Straight-line spreads the $9,000 evenly; double-declining takes 40% of the book value each year; sum-of-the-years' digits takes 5/15, 4/15 and so on. MACRS treats the machine as 5-year property.
| Year | Straight-line | Double-declining | Sum of digits | MACRS 5-year |
|---|---|---|---|---|
| 1 | $1,800 | $4,000 | $3,000 | $2,000 |
| 2 | $1,800 | $2,400 | $2,400 | $3,200 |
| 3 | $1,800 | $1,440 | $1,800 | $1,920 |
| 4 | $1,800 | $864 | $1,200 | $1,152 |
| 5 | $1,800 | $296 | $600 | $1,152 |
| 6 | – | – | – | $576 |
With no salvage value, double-declining would switch to straight-line in year 4, when spreading the remaining value over the years left gives more than 40% of the book value.
MACRS percentages (GDS, half-year convention)
IRS Publication 946, Table A-1. Multiply the asset's basis by the percentage for each recovery year.
| Year | 3-year | 5-year | 7-year | 10-year | 15-year | 20-year |
|---|---|---|---|---|---|---|
| 1 | 33.33% | 20% | 14.29% | 10% | 5% | 3.75% |
| 2 | 44.45% | 32% | 24.49% | 18% | 9.5% | 7.219% |
| 3 | 14.81% | 19.2% | 17.49% | 14.4% | 8.55% | 6.677% |
| 4 | 7.41% | 11.52% | 12.49% | 11.52% | 7.7% | 6.177% |
| 5 | 11.52% | 8.93% | 9.22% | 6.93% | 5.713% | |
| 6 | 5.76% | 8.92% | 7.37% | 6.23% | 5.285% | |
| 7 | 8.93% | 6.55% | 5.9% | 4.888% | ||
| 8 | 4.46% | 6.55% | 5.9% | 4.522% | ||
| 9 | 6.56% | 5.91% | 4.462% | |||
| 10 | 6.55% | 5.9% | 4.461% | |||
| 11 | 3.28% | 5.91% | 4.462% | |||
| 12 | 5.9% | 4.461% | ||||
| 13 | 5.91% | 4.462% | ||||
| 14 | 5.9% | 4.461% | ||||
| 15 | 5.91% | 4.462% | ||||
| 16 | 2.95% | 4.461% | ||||
| 17 | 4.462% | |||||
| 18 | 4.461% | |||||
| 19 | 4.462% | |||||
| 20 | 4.461% | |||||
| 21 | 2.231% |
- 3-year property: for example over-the-road tractor units, race horses over 2 years old.
- 5-year property: for example cars, taxis, buses, trucks, computers and office machinery.
- 7-year property: for example office furniture and fixtures, property with no class life.
- 10-year property: for example vessels and barges, single-purpose farm structures, fruit and nut trees.
- 15-year property: for example land improvements such as fences, roads and shrubbery.
- 20-year property: for example farm buildings, municipal sewers.
Choosing a method
- Financial statements usually use straight-line, which is simple and matches assets that wear evenly.
- Accelerated methods (declining balance, sum-of-the-years' digits) suit assets that lose value fastest when new, such as vehicles and computers.
- Units of production fits machines whose wear follows use: miles driven, hours run or items made.
- US tax returns generally use MACRS. For tax years beginning in 2026 you may instead expense up to $2,560,000 under section 179 (reduced once qualifying purchases pass $4,090,000), and the 2025 tax law restored 100% bonus depreciation for qualified property acquired and placed in service after January 19, 2025. Neither is included in this schedule.
- Property placed in service late in the year: if more than 40% of the year's depreciable property goes into service in the last three months, MACRS uses the mid-quarter tables instead.
This calculator gives estimates, not tax or accounting advice; check with an accountant or tax professional for your return. To compare an asset purchase with its returns, try the payback period calculator.
Sources: IRS Publication 946 (Table A-1, property classes, bonus depreciation); IRS Rev. Proc. 2025-32 (2026 section 179 limits).
Frequently asked questions
How do I calculate straight-line depreciation?
Subtract the salvage value from the cost and divide by the useful life. A $10,000 machine with a $1,000 salvage value and a five-year life depreciates by $9,000 ÷ 5 = $1,800 a year.
How does double-declining balance depreciation work?
Each year you take twice the straight-line rate of the remaining book value. For a five-year asset that is 40%: on $10,000 it gives $4,000, $2,400, $1,440 and $864, then $296 in year 5 to stop at the $1,000 salvage value.
What is sum-of-the-years' digits depreciation?
An accelerated method that multiplies the depreciable amount by a falling fraction. For a five-year life the digits add to 15, so a $9,000 depreciable amount gives 5/15 = $3,000, then $2,400, $1,800, $1,200 and $600.
What are the MACRS rates for 5-year property?
Under the GDS half-year convention in IRS Publication 946 Table A-1: 20%, 32%, 19.2%, 11.52%, 11.52% and 5.76% over six tax years. A $10,000 computer is depreciated $2,000, $3,200, $1,920, $1,152, $1,152 and $576.
Why does MACRS take one year longer than the recovery period?
The half-year convention treats property as placed in service in the middle of the first year, so only half a year of depreciation is allowed in year 1 and the remaining half year falls in the year after the recovery period ends.