Depreciation Calculator (SL & MACRS)
Build the full straight-line or MACRS depreciation schedule with the correct recovery class — and see exactly what year 1 gives you under each method.
Written by Dorothy Ibrahim, 10+ years in banking & finance
Reviewed by Benton Jona, EA (Enrolled Agent) — 2026-07-13
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How we calculate this
This calculator builds the full year-by-year depreciation schedule for an asset under either straight-line or MACRS (GDS half-year convention), using the correct IRS recovery class — 5-year for vehicles and computers, 7-year for furniture and most equipment, 15-year for land improvements, and straight-line only for 27.5-year residential and 39-year nonresidential real property. Check §179 and 100% bonus depreciation first: most small businesses can expense equipment entirely in year 1 and never need this schedule — buildings, which cannot be §179'd or bonus'd, are where it earns its keep.
The formulas
- Straight-line (personal property, Pub 946 GDS half-year)
- asset cost ÷ recovery period each full year, with year 1 and a final stub year each getting half a year (cost ÷ (2 × recovery period))This is the IRS tax straight-line election, not book straight-line: salvage value is NOT subtracted, and the half-year convention spreads an N-year asset over N+1 tax years (e.g. a 5-year asset: 10/20/20/20/20/10% of cost).
- Straight-line (real property, mid-month convention)
- annual = cost ÷ 27.5 (residential) or ÷ 39 (nonresidential); year 1 is prorated as if placed in service mid-monthReal property must use straight-line — the MACRS accelerated tables do not apply.
- MACRS (GDS half-year)
- each year's deduction = cost × that year's percentage from the IRS Pub 946 Table A-1 half-year tableA 5-year asset actually depreciates across 6 tax years (20%, 32%, 19.2%, 11.52%, 11.52%, 5.76%) because of the half-year convention. MACRS ignores salvage value.
Worked example
- Take the defaults: a $50,000 asset in the 5-year class, straight-line method. Tax straight-line follows IRS Pub 946 (GDS), so salvage value is not subtracted and the half-year convention applies.
- A full year would be $50,000 ÷ 5 = $10,000, but the half-year convention gives year 1 only half of that: $50,000 ÷ (2 × 5) = $5,000.
- The schedule runs six tax years — 10%, 20%, 20%, 20%, 20%, 10% of cost ($5,000, then four years of $10,000, then a $5,000 stub) — recovering the full $50,000 basis by year 6.
- Switching the same asset to MACRS front-loads it further: year 1 is 20% ($10,000, double the straight-line year-1 figure), year 2 jumps to 32% ($16,000), and the tail years shrink correspondingly, still across 6 tax years.
Rates, benchmarks & sources
- MACRS GDS half-year percentage tables for the 3-, 5-, 7-, 15-, and 20-year classes, embedded verbatim in our config — IRS Pub 946 Table A-1
- Recovery-class assignments (5-yr vehicles/computers, 7-yr furniture/equipment, 15-yr land improvements, 27.5-yr residential rental, 39-yr nonresidential) and the straight-line mid-month convention for real property — IRS Pub 946
Figures current as of 2026-07-02. See our methodology & editorial standards for how constants are versioned and verified.
What this tool doesn’t model
- This is the slow path on purpose: it does not apply §179 or 100% bonus depreciation, which let most businesses expense equipment fully in year 1 — run the Section 179 tool first and use this schedule for what remains (or for buildings).
- MACRS here uses the GDS half-year convention only; the mid-quarter convention (required when over 40% of the year's property is placed in service in Q4) and the slower ADS system are not modeled.
- Real-property straight-line simplifies the IRS mid-month tables to a monthly proration, so first- and last-year figures can differ from the published tables by small amounts.
- Federal only — states that decouple from federal depreciation, and the income-tax value of each deduction, are out of scope; this is an estimate, not filing advice.
- Listed-property business-use limits (under 50% business use forces straight-line ADS) are not enforced by the tool.
Frequently asked questions
Do I even need a depreciation schedule, or can I just expense the purchase?
For most equipment bought by a profitable small business, §179 and permanent 100% bonus depreciation allow full year-1 expensing — no multi-year schedule needed. This schedule matters in three main cases: buildings (which can never be §179'd or bonus'd, though land improvements can), taxpayers who elect out of bonus to save deductions for later years, and states that require slower depreciation for their own tax.
Which recovery class does my asset belong to?
IRS Pub 946 assigns classes by asset type: cars, trucks, and computers are 5-year property; office furniture and most machinery and equipment are 7-year; land improvements like parking lots and fences are 15-year; residential rental buildings are 27.5-year and nonresidential buildings 39-year (both straight-line only). Land itself is never depreciable. When in doubt, Pub 946's Appendix B has the detailed class lists.
Why does my 5-year MACRS schedule show six years of deductions?
The half-year convention assumes every asset is placed in service at mid-year, so year 1 gets only half a year of depreciation (20% instead of 40% for a 5-year asset) and the leftover half-year lands in year 6 (5.76%). The percentages — 20, 32, 19.2, 11.52, 11.52, 5.76 — come straight from IRS Pub 946 Table A-1 and always sum to 100% of cost.
What does depreciation do to my taxes when I sell the asset?
Depreciation reduces your basis, so a sale above the depreciated basis triggers recapture: the gain attributable to prior deductions is taxed as ordinary income (Section 1245 for equipment) rather than capital gain, and real property has its own unrecaptured-1250 rules. In effect, depreciation defers tax rather than erasing it — worth remembering before expensing an asset you plan to resell soon.
Does this schedule work for my state return too?
Not necessarily. This tool computes federal MACRS and straight-line only. Many states decouple from federal depreciation — especially bonus depreciation and §179 limits — and require their own schedules or add-backs, so the same asset can carry two different book values. It is an estimate for federal planning, not filing advice; your state's conformity rules determine the state-side numbers.
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themoneysheet provides educational estimates, not financial, tax, or legal advice. Figures use published rates and formulas current as of the date shown, but your situation may differ. Consult a qualified professional (CPA, attorney, or licensed advisor) before making financial decisions. Federal figures only unless noted. State taxes vary.