MACRS Depreciation Calculator

This calculator builds a year-by-year MACRS depreciation schedule for a business asset. Enter the cost, pick the property class, and optionally layer Section 179 expensing and bonus depreciation on top. It returns your total first-year deduction, the remaining basis, and the deduction, cumulative total, and book value for every year of the recovery period.

The 2026 headline: the One Big Beautiful Bill Act restored 100% bonus depreciation for qualifying property acquired after January 19, 2025, and raised Section 179 to $2,560,000 for 2026 (phase-out starting at $4,090,000, per Rev. Proc. 2025-32). For most equipment, that means you can deduct the full cost in the year you place it in service (passenger vehicles are the main exception, because of the luxury-auto caps) — or spread it out with regular MACRS if that saves more tax over time.

The calculator is for informational purposes only; its schedule is an estimate and does not replace Form 4562 or advice on your specific facts.

How to use each input

Asset cost. Your depreciable basis: purchase price plus sales tax, freight, and installation. Subtract any trade-in allowance where applicable and any amount you've already expensed under the de minimis safe harbor. For property converted from personal use, use the lower of cost or fair market value on the conversion date.

Property class. Choose the recovery period from IRS Publication 946:

For the two building classes the calculator asks for the month placed in service and applies the mid-month convention: a building placed in service in January gets 11.5 months of depreciation in year 1 (3.485% of basis for residential rental, matching Table A-6), and one placed in service in December gets half a month. Buildings have a recovery period over 20 years, so they never qualify for bonus depreciation, and a residential rental building is not Section 179 property at all. Improvements such as qualified improvement property (15-year) can still get bonus.

Method. "MACRS GDS" uses the accelerated IRS percentage tables. "Straight-line election" spreads the basis evenly over the GDS recovery period with the half-year convention (half a year in year 1 and half in the final year), which is what you get if you elect straight-line on Form 4562. It is not ADS: the Alternative Depreciation System often uses a longer recovery period (for example, 10 years for office furniture instead of 7, and 30 years for residential rental buildings), so check Publication 946's ADS table if ADS is mandatory for your asset.

Bonus depreciation %. The default is 100%, which applies to property acquired after January 19, 2025 (IRS Notice 2026-11 gives the interim rules). Property acquired before January 20, 2025, for example under a binding contract signed earlier, keeps the old phase-down based on the year it is placed in service: 40% in 2025, 20% in 2026, and nothing from 2027. Choose 0% if you elect out for that class of property.

Section 179 amount. Enter how much of the cost you want to expense under Section 179. The calculator caps it at the asset's cost and at the dollar limit for the year placed in service ($2,560,000 for 2026, or $2,500,000 for 2025, reduced dollar for dollar by the asset's cost above $4,090,000 or $4,000,000). It then subtracts the amount first, applies bonus to what's left, and runs MACRS on the remainder, the same order Form 4562 uses. If you have other Section 179 purchases in the same year, the phase-out counts all of them, so check the combined total yourself.

Business taxable income (optional). Section 179 can't create a loss: the deduction is limited to taxable income from your active trades or businesses (including wages), and the excess carries forward to next year. Enter that income and the calculator splits the Section 179 amount into what you can deduct now and what carries forward. Bonus depreciation has no such limit.

The math behind the schedule

1. Section 179 comes off the top: basis after 179 = cost − Section 179.
2. Bonus depreciation applies to what's left: bonus = (cost − 179) × bonus %.
3. Regular MACRS applies the IRS table percentages to the remaining basis. The year-1 percentage already includes the half-year convention — you do not halve it again.
4. Year-1 deduction = Section 179 + bonus + year-1 MACRS.

The half-year GDS percentages the calculator uses:

The 15-year column continues at about 5.9% a year through year 15 and ends with 2.95% in year 16.

Worked example 1: $60,000 excavator, three ways

A contractor buys a $60,000 compact excavator (5-year property) in May 2026.

A. 100% bonus. Year-1 deduction = $60,000. Nothing is left to depreciate.

B. Elect out of bonus, no Section 179. Regular MACRS:

C. $25,000 Section 179, elect out of bonus. Remaining basis $35,000. Year 1 = $25,000 + ($35,000 × 20%) = $25,000 + $7,000 = $32,000. Year 2 = $35,000 × 32% = $11,200, and so on.

Which is best? If the contractor's 2026 profit is high and the marginal rate (income tax plus self-employment tax) is near its peak, option A front-loads the savings. If 2026 is a startup year with little income, option B preserves deductions for years when they offset income taxed at higher rates. Bonus can create a net operating loss; Section 179 cannot exceed business taxable income, and any excess carries forward.

Worked example 2: $48,000 office build-out furniture with a partial Section 179

A consulting firm places $48,000 of desks, chairs, and cabinets (7-year property) in service and wants a $20,000 deduction this year to match a modest profit.

• Section 179: $20,000 → remaining $28,000
• Bonus: elect out (0%)
• Year-1 MACRS: $28,000 × 14.29% = $4,001
• Year-1 total: $20,000 + $4,001 = $24,001
• Year 2: $28,000 × 24.49% = $6,857

Section 179 is elected asset by asset and dollar by dollar, which makes it the precise tool when you want a specific deduction. The bonus election-out, by contrast, applies to every asset in the same class placed in service that year.

Section 179 vs bonus depreciation at a glance

Use Section 179 when you want a precise deduction amount, and bonus when you want the maximum write-off without regard to income.

How to read the results

• Year-1 total is the figure that hits Form 4562 and then Schedule C line 13 (or the corporate or partnership return).
• Remaining basis after year 1 is what future MACRS deductions recover.
• Book value is your tax basis at year-end. If you sell the asset for more than this number, the difference — up to the depreciation you've taken — is Section 1245 recapture taxed as ordinary income.
• Schedule rows stop when book value reaches zero.

Limits the calculator does not apply

• Mid-quarter convention. If more than 40% of the year's depreciable personal property (excluding real property) was placed in service in the final quarter, every asset that year uses the mid-quarter tables. For 5-year property placed in service in Q4, year 1 drops to 5% instead of 20%.
• Rounding in the building tables. The calculator computes the mid-month fractions exactly; IRS Table A-7a for 39-year property rounds slightly differently (for example 2.461% instead of 2.457% for January), a difference of a few dollars per $100,000.
• Other Section 179 purchases. The phase-out above uses only this asset's cost.
• Passenger-vehicle caps. Cars, light trucks, and vans under 6,000 lbs gross vehicle weight are subject to annual "luxury auto" depreciation limits under Section 280F, no matter what the calculator shows. SUVs over 6,000 lbs are not capped the same way but have a separate Section 179 ceiling of $32,000 for 2026.
• Business-use percentage. For listed property like vehicles, multiply cost by your business-use percentage before entering it. If business use is 50% or less, you can't use bonus, Section 179, or accelerated MACRS.
• State conformity. Several states, including California, do not follow federal bonus depreciation and cap Section 179 far lower, so your state return may need a separate schedule.

When electing out of 100% bonus makes sense

Taking everything in year 1 isn't always optimal:

• Low-income year. A $60,000 write-off against $20,000 of profit creates a loss that may only carry forward (NOLs offset up to 80% of taxable income in later years).
• QBI interaction. Bigger depreciation lowers qualified business income and therefore the 20% QBI deduction.
• Rising-income outlook. If you expect to be in a higher bracket in 2027–2029, spreading deductions forward can save more total tax.
• Planned sale soon. Selling an asset two years after expensing it triggers recapture of most of the price as ordinary income.

Run each scenario here, then plug the resulting net profit into the 1099 tax calculator to compare the actual tax under each. For S corporation owners, depreciation reduces the K-1 income that sits on top of your salary; the S corp payroll tax calculator helps you set that salary.

For the rules behind each input — GDS vs ADS, listed property, vehicles, recapture, and the full OBBBA changes — read the MACRS depreciation guide. Contractors weighing a truck or tool purchase can also see how depreciation fits with other write-offs in the contractor tax deductions guide, and home-based business owners depreciating part of a house should read the home office deduction guide, which walks through the 39-year schedule that applies to an office in your home.