Depreciation for taxes

Depreciation Calculator: Tax Recovery & Value Tracking

This calculator builds a year-by-year depreciation schedule from MACRS GDS percentage tables or straight-line, declining balance, sum-of-years' digits, and units-of-production methods. It multiplies each year's deduction by your marginal tax bracket to show modeled tax savings in the results panel and schedule table. It does not apply Section 179 expensing, bonus depreciation, or mid-quarter MACRS. Illustrative only; not tax advice.

By Jeff Beem

Updated June 9, 2026

Asset details

Asset class (Internal Revenue Service category)

Asset cost

Salvage value

Recovery period (years)

Tax bracket (%)

Depreciation method

Method

Convention

Month placed in service

View year

Year 1Straight-Line

$4,500.00

Depreciation expense

$1,125.00

Tax savings (25%)

Book value

$45,500.00

Cumulative

$4,500.00

Year 19.0%

Total saved$11,250.00

Recovery6 yr

Tax & asset notes

Illustrative only, not tax advice. At 25%, each $1,000 of depreciation models about $250 in tax savings. Section 179 immediate expensing and bonus depreciation are separate elections with annual limits; this schedule shows regular MACRS or book methods only. Track book value in the chart and table to time replacements; remember inflation can push replacement cost above ending book value.

Value over time

Year 0Year 6

Book value

Accumulated

Depreciation schedule

Year 1

Beginning

$50,000.00

Depreciation

$4,500.00

Accumulated

$4,500.00

Ending

$45,500.00

Tax savings

$1,125.00

Year 2

Beginning

$45,500.00

Depreciation

$9,000.00

Accumulated

$13,500.00

Ending

$36,500.00

Tax savings

$2,250.00

Year 3

Beginning

$36,500.00

Depreciation

$9,000.00

Accumulated

$22,500.00

Ending

$27,500.00

Tax savings

$2,250.00

Year 4

Beginning

$27,500.00

Depreciation

$9,000.00

Accumulated

$31,500.00

Ending

$18,500.00

Tax savings

$2,250.00

Year 5

Beginning

$18,500.00

Depreciation

$9,000.00

Accumulated

$40,500.00

Ending

$9,500.00

Tax savings

$2,250.00

Year 6

Beginning

$9,500.00

Depreciation

$4,500.00

Accumulated

$45,000.00

Ending

$5,000.00

Tax savings

$1,125.00

Year	Beginning	Depreciation	Accumulated	Ending	Tax savings

1	$50,000.00	$4,500.00	$4,500.00	$45,500.00	$1,125.00
2	$45,500.00	$9,000.00	$13,500.00	$36,500.00	$2,250.00
3	$36,500.00	$9,000.00	$22,500.00	$27,500.00	$2,250.00
4	$27,500.00	$9,000.00	$31,500.00	$18,500.00	$2,250.00
5	$18,500.00	$9,000.00	$40,500.00	$9,500.00	$2,250.00
6	$9,500.00	$4,500.00	$45,000.00	$5,000.00	$1,125.00

How to use this calculator

Select asset class and cost, choose MACRS or a book method, and enter your marginal tax bracket. Use View year to drive the headline depreciation and tax savings in the results panel; the schedule and chart always show the full recovery period. MACRS uses Internal Revenue Service General Depreciation System (GDS) tables (salvage locked to zero). Other methods allow salvage, convention choice, and optional units for production depreciation. Month placed in service affects 27.5- and 39-year property; personal-property MACRS follows the built-in half-year table.

Reading your depreciation schedule

Sections 01–02 set asset class, cost, method, and tax bracket; the dark card follows View year. The schedule table and chart list every period.

Example: $50,000, 5-year MACRS, Year 1

By default: $50,000 cost, 5-Year Property, MACRS, 25% bracket, View year 1. Year 1 depreciation $10,000 (20%), modeled tax savings $2,500, remaining book value $40,000. Year 2 is the peak at $16,000 (32%). Six-year MACRS table fully depreciates the asset; total modeled tax savings $12,500. Green callout: about +19% more deductions in the first three years vs straight-line on the same basis.

View year and the results panel

Change View year in section 02 to drive the headline Depreciation expense and Tax savings on the dark card. Book value, Cumulative, Year 1 %, Total saved, and Recovery years update with the schedule. The highlighted row in the depreciation schedule matches the selected view year.

Method dropdown and MACRS vs book

Pick MACRS for IRS GDS tables (salvage locked to zero, convention menu disabled). Straight-line, 150%/200% declining balance, sum-of-years' digits, and Units of Production use salvage and convention choices; units mode reveals Total estimated units and Units per year fields.

Depreciation calculator: MACRS schedules and tax savings

This page builds year-by-year depreciation from MACRS GDS tables or book methods and models tax savings from your bracket. It does not file returns or apply Section 179 or bonus depreciation.

What this calculator does

Enter asset cost, class, depreciation method, and marginal tax rate. You get a full schedule: annual expense, accumulated depreciation, ending book value, and bracket-based tax savings. MACRS covers 3- through 20-year GDS half-year tables plus 27.5- and 39-year straight-line with mid-month placement. Non-MACRS methods include straight-line, 150% and 200% declining balance (with optional switch to straight-line), sum-of-years' digits, and units of production. It does not handle Section 179, bonus depreciation, listed-property limits, or mid-quarter MACRS.

How the math works

Book straight-line spreads depreciable basis evenly:

D_{\text{SL}} = \frac{C - S}{N}

where C is cost, S is salvage (zero under MACRS), and N is recovery years. MACRS personal property multiplies cost by IRS Appendix A GDS half-year percentages for the selected class (e.g. 5-year: 20%, 32%, 19.20%, then 11.52%, 11.52%, 5.76%). Tax savings each year = depreciation × (marginal bracket ÷ 100).

Limits of the model

No Form 4562 output, state depreciation rules, or alternative minimum tax adjustments. Asset class labels in the dropdown are illustrative recovery periods—confirm property class on your return. Section 179 and bonus depreciation can front-load deductions before regular MACRS; this tool schedules the MACRS or book remainder only. For financed purchases, see the Business Loan Calculator; for marginal rate context, see the Take-Home Paycheck Calculator.

Depreciation Calculator FAQ

What is MACRS and why is it the default method?

MACRS (Modified Accelerated Cost Recovery System) is the depreciation system most US businesses use on federal tax returns for tangible property. This calculator applies IRS GDS half-year percentage tables for 3- through 20-year classes (and straight-line mid-month logic for 27.5- and 39-year real property). Planning model only—not a filed return.

What is the difference between straight-line and declining balance?

Straight-line spreads (cost minus salvage) evenly over the recovery period. 150% or 200% declining balance applies a fixed rate to remaining book value each year and may switch to straight-line when that yields a larger deduction. MACRS 3- through 10-year property uses published table rates that already embed that switch.

Why does MACRS ignore salvage value?

For MACRS, salvage is treated as $0; the Salvage value field disables when MACRS is selected. Book methods (straight-line, declining balance, sum-of-years' digits) can use salvage if you enter it.

How do I read tax savings in the results panel?

Each year's depreciation expense is multiplied by the marginal tax bracket you enter (default 25%). The dark card shows Tax savings for the View year you pick; the schedule table lists tax savings on every row. Actual savings depend on your full return, not this single rate alone.

What is the half-year convention?

For MACRS personal property, GDS half-year convention is built into the IRS tables (Year 1 is half a full year's rate; a short final year completes recovery). For straight-line and declining-balance modes you can pick half-year, mid-quarter, mid-month, or full-year from the Convention menu. MACRS locks that menu because the tables already assume half-year (or mid-month for 27.5/39-year property).

Does this include Section 179 or bonus depreciation?

No. The schedule covers MACRS table depreciation plus straight-line, declining balance, sum-of-years' digits, and units-of-production modes. Section 179 immediate expensing and bonus depreciation are separate elections with their own limits and phase-down rules; verify current-year IRS guidance before you rely on them.

Sources & citations

References used for the calculation method and definitions. Links open in a new tab when available.

[1]

IRS – Publication 946: How to Depreciate Property

Official IRS guidance on MACRS methods, recovery periods, conventions, and Appendix A percentage tables.

Financial Estimation Note

General Projections: Results are mathematical estimates based on the rates and formulas currently loaded for this tool, including year-specific tax data where noted. They are intended for high-level planning only.

No Advice Provided: This site does not provide financial, tax, or legal advice. Using this tool does not create a client-advisor relationship with CalcRegistry.

Confirm Numbers: Financial laws change frequently. Please verify all results with a qualified professional (CPA, Financial Planner, or Lawyer) before making significant financial decisions.