MACRS Depreciation Calculator
Estimate MACRS depreciation for a business asset, build the full schedule, and see what changes when you take Section 179 or bonus depreciation.
Built around IRS Pub. 946, Form 4562, and current federal rules.
First-year deduction
2026$0
on a $0 basis
Advanced adjustments §179, bonus, ADS, overrides, mid-quarter
Expenses part of the cost in year one. Limited by business taxable income.
First-year deduction on qualified property.
GDS = faster. ADS = straight line, longer life.
3, 5, 7, 10, 15, 20, 27.5, or 39.
Auto uses half-year, switches to mid-quarter if the Q4 test below is over 40%, and uses mid-month for real property.
Total basis across all assets this year.
Runs the mid-quarter 40% test.
Federal only; states may differ.
Depreciation schedule
| Year | Rate | Depreciation | Cumulative | Remaining |
|---|
How year one breaks down
Why the timing matters
This is an estimate, not tax advice. It computes federal MACRS for planning. Your filed return can differ because of income limits, auto caps, state rules, and short tax years. Confirm anything material with a CPA or enrolled agent.
The basics
What MACRS depreciation is
Instead of deducting an asset's full cost the year you buy it, MACRS spreads the write-off over a set number of years and front-loads the early ones.
GDS vs. ADS
GDS (the default) allows accelerated 200%/150% declining balance. ADS is straight line over longer lives, required for some property and ≤50% business use.
Recovery period
How many years you write the asset off over, set by its class: 5 years for computers and vehicles, 7 for most equipment, 39 for a commercial building.
Placed in service
When the asset is ready and available for use, not when you paid for it. Depreciation starts here, and the month or quarter can change year one.
Conventions
Half-year is the default. Mid-quarter kicks in when over 40% of the year's basis lands in Q4. Mid-month applies to real property.
The math
The formula, and the order it runs in
Each year's regular MACRS deduction is simple once the basis is set. The work is getting to that basis, and the order is fixed.
Year deduction = Remaining MACRS basis × MACRS rate (Pub. 946 table)
Business-use basis
Cost times the business-use percentage.
Section 179
Subtract any amount you elect to expense.
Bonus depreciation
Subtract the bonus percentage of what's left.
Regular MACRS
Apply the table rate to the remaining basis, year by year.
The numbers
The 2026 figures that drive your deduction
Three year-specific numbers determine how much you can write off in year one: the Section 179 limit, the phase-out threshold, and the bonus depreciation rate. The calculator applies all three automatically when you pick a tax year.
Section 179 lets you expense up to $2,560,000 of equipment immediately, but the benefit shrinks dollar-for-dollar once you place more than $4,090,000 of property in service during the year. Bonus depreciation is 100% for 2026, so you can write off the entire remaining basis in year one if you choose.
$2,560,000
2026 Section 179 limit
Phase-out starts at $4,090,000 of total property placed in service. Bonus depreciation: 100% (permanent, Notice 2026-11). SUV cap: $32,000. All figures confirmed against IRS Pub. 946 and Rev. Proc. 2025-32.
The classes
How long you write off an asset
The recovery period is set by the asset's class life, not by how long you plan to use it. Most business equipment falls into the 5 or 7-year classes; real estate takes 27.5 or 39 years. The calculator picks the right period automatically when you choose an asset type, but you can override it in Advanced.
Under GDS (the default system), 3/5/7/10-year property uses 200% declining balance, while 15/20-year property uses 150% declining balance. Real property always uses straight line with the mid-month convention.
Common business assets
3-year property (breeding animals, tools) and 25-year water utility property also exist but are less common. Under GDS, 3/5/7/10-year classes use 200% DB; 15/20-year use 150% DB; real property uses straight line, mid-month.
Worked examples
Four ways it plays out
The same $50,000 asset, deducted very differently depending on the elections you make. Change the inputs above to match your own.
$50,000 of office furniture, 100% business, placed in service in March. No Section 179, no bonus.
- Basis$50,000
- Year 1 × 14.29%$7,145
- Year 2 × 24.49%$12,245
$12,000 of computers, 100% business, placed in service in June. No elections.
- Basis$12,000
- Year 1 × 20%$2,400
- Year 2 × 32%$3,840
$50,000 of equipment, elect $20,000 of Section 179, then run MACRS on the rest.
- Section 179 expense$20,000
- Remaining basis$30,000
- MACRS Y1 × 14.29%$4,287
$50,000 of equipment, take 100% bonus depreciation (the 2026 rate), no Section 179.
- Bonus 100% (2026)$50,000
- Remaining basis$0
The form
How the result maps to Form 4562
The calculator's year-one output flows through IRS Form 4562. Part I handles Section 179, Part II handles bonus, Part III handles regular MACRS, and the Part IV total flows to Schedule C, Line 13. Here's how three scenarios map to specific lines.
Regular MACRS only (bonus elected out)
7-year · half-year$50,000 office furniture, 100% business, 7-year, half-year. Year 1 deduction: $7,145.
Under 2026 law, 100% bonus is the default. Getting to pure regular MACRS requires affirmatively electing out of bonus for this property class.
| Form 4562 line | What goes there | Amount |
|---|---|---|
| Part II, Line 14 | Bonus depreciation (elected out) | $0 |
| Part III, Line 19c | 7-year property, 200% DB, half-year | $7,145 |
| Part IV, Line 22 | Total depreciation | $7,145 |
→ Schedule C, Line 13: $7,145
Section 179 + regular MACRS
7-year · §179$50,000 equipment, elect $20,000 Section 179, 7-year, half-year. Year 1 total: $24,287.
Assumes business income is at least $20,000 to absorb the full Section 179 deduction, and bonus is elected out.
| Form 4562 line | What goes there | Amount |
|---|---|---|
| Part I, Line 6 | Elected Section 179 cost | $20,000 |
| Part I, Line 12 | Section 179 deduction | $20,000 |
| Part II, Line 14 | Bonus depreciation (elected out) | $0 |
| Part III, Line 19c | 7-year property on $30,000 remaining | $4,287 |
| Part IV, Line 22 | Total depreciation | $24,287 |
→ Schedule C, Line 13: $24,287
100% bonus (the 2026 default)
7-year · 100% bonus$50,000 equipment, 100% bonus depreciation, 7-year. Year 1 total: $50,000.
This is the default outcome under 2026 law; no election required.
| Form 4562 line | What goes there | Amount |
|---|---|---|
| Part II, Line 14 | 100% special depreciation allowance | $50,000 |
| Part III, Line 19c | 7-year property ($0 remaining basis) | $0 |
| Part IV, Line 22 | Total depreciation | $50,000 |
→ Schedule C, Line 13: $50,000
Sole proprietors only. This mapping follows Form 4562 Part III (regular MACRS) and Part II (bonus) through to Schedule C, Line 13. Partnerships and S-corps pass depreciation through separately on K-1s, and the line assignments differ. If you file as anything other than a sole proprietor or single-member LLC, confirm the form flow with a CPA or enrolled agent.
Watch out
Common mistakes to avoid
- Depreciating the land under a building. Land isn't depreciable, so use only the building's value.
- Forgetting business use. A 70%-business asset only depreciates 70% of its cost.
- Missing the mid-quarter test after a big Q4 purchase, which changes every asset placed in service that year.
- Stacking Section 179, bonus, and MACRS on the same basis. Each one reduces the basis for the next.
- Assuming your state follows federal bonus and Section 179. Many don't.
- Ignoring the auto caps on vehicles, which limit the deduction regardless of MACRS.
When to bring in a pro. Talk to a CPA or enrolled agent when real money rides on the answer: vehicles with annual passenger-auto caps, real estate (separating building from land), a short tax year, selling an asset the same year you bought it, or deciding between GDS and ADS for an asset.
Behind the answer
How I tested the MACRS depreciation calculator
Before this calculator went live, I validated every calculation path against 58 test cases derived from IRS Pub. 946 and the Form 4562 instructions. Here's what that covers.
Rate tables
The calculator's depreciation rates match the official IRS Pub. 946 percentage tables (Appendix A) for every common asset class and convention — half-year for 3-, 5-, 7-, 10-, 15-, and 20-year property, and mid-quarter for 5- and 7-year property across all four quarters. If any rate doesn't match the IRS table to the penny, the test fails.
Order of operations
Section 179 reduces the basis first, then bonus, then regular MACRS on what's left. I tested this with stacked elections (all three on the same asset), partial business use, the mid-quarter auto-detection threshold, and real property under the mid-month convention.
Year-specific figures
The 2026 Section 179 limit ($2,560,000), phase-out threshold ($4,090,000), and 100% bonus rate are each checked against the values I confirmed in IRS Pub. 946 and Rev. Proc. 2025-32. The 2025 OBBBA mid-year boundary — 40% bonus before Jan 20, 100% after — is tested at the exact date boundary.
Bad inputs
Zero cost, over-100% business use, Section 179 exceeding the asset's basis — all caught and surfaced as field-level errors before the calculation runs, so you never get a misleading number from a typo.
Every test case traces back to the IRS Pub. 946 table or Form 4562 line it came from. You can download all 58 test cases as JSON and check any rate or schedule against the cited source. If you spot a result that doesn't match, tell me and I'll fix it.
FAQ
Questions people ask
How does it handle Section 179 and bonus?
In the IRS order: business-use basis, then Section 179, then bonus, then regular MACRS on whatever basis is left. You see each step in the first-year breakdown.
Half-year or mid-quarter?
Usually half-year. You must use mid-quarter if more than 40% of the total basis you placed in service that year came in the last three months. Enter your year total and Q4 total in Advanced and it runs that test.
Does it do state depreciation?
No, federal only. Many states don't follow federal bonus or the full Section 179 amount, so your state number can differ. There's a note field to track that separately.
Why doesn't it match my tax software?
Usually the Section 179 income limit, passenger-auto caps, a short tax year, a same-year disposal, or a state adjustment. This tool skips those to stay simple, so treat it as a planning estimate.
Can I use it for a vehicle or building?
With care. Vehicles are 5-year but have annual caps this tool doesn't apply. Buildings use 39-year (commercial) or 27.5-year (residential rental) straight line, mid-month. Enter the building value only, not the land.
What tax year does it use?
The calculator defaults to tax year 2026 and lets you switch years at the top; the Section 179 limit, phase-out threshold, and bonus rate all follow the year you pick, with the 2026 figures confirmed against IRS Publication 946 and Revenue Procedure 2025-32. The 2025 figures reflect the One Big Beautiful Bill Act (OBBBA, P.L. 119-21): 100% bonus for property acquired and placed in service after Jan 19, 2025, and 40% before that date. The calculator warns if you enter a 2025 placed-in-service date before January 20.
What this calculator doesn't model (and why)
Short tax years
If your business started mid-year or changed its accounting period, depreciation is prorated for the year's length, which changes every rate. This calculator assumes a full 12-month tax year.
Same-year disposal
If you sell an asset the same year you bought it, the convention still applies but the calculation changes. Not modeled here — the calculator assumes you hold the asset all year.
Passenger vehicle caps
Vehicles are 5-year property but have annual deduction caps under Section 280F that limit the write-off regardless of what MACRS says. This tool doesn't apply those caps — use it for vehicles with caution.
AMT and ACE adjustments
Depreciation can differ between regular tax and Alternative Minimum Tax, creating AMT adjustments. This calculator computes regular tax depreciation only.
Partnership and S-corp pass-through
Section 179 and depreciation pass through to partners and shareholders separately on K-1s, not on the entity's return. This tool targets sole proprietors and single-member LLCs filing Schedule C.
State depreciation
Many states don't follow federal bonus depreciation or the full Section 179 amount. There's a note field in Advanced to track your state's rules, but the calculator computes federal depreciation only.
Updates
What's changed
- Added more detail on how the result flows to your tax return, what this calculator doesn't cover, and where the numbers come from.
- Updated the 2026 figures (Section 179 limit, phase-out threshold, and bonus depreciation rate) to match the latest IRS guidance.
Sources
Where the numbers come from
- IRS Publication 946: How to Depreciate Property
- IRS Form 4562: Depreciation and Amortization
- Rev. Proc. 2025-32 (2026 inflation adjustments, 2025-45 I.R.B. 695)
- IRS Notice 2026-11 / IR-2026-06 (100% bonus depreciation post-OBBBA)
- IRS Form 4562 Instructions (2025): line-by-line guidance for Parts I-V
- Pub. 946 Appendix A: MACRS Percentage Tables (A-1 half-year, A-2 to A-5 mid-quarter, A-6 residential rental, A-7a nonresidential real, A-14 150% DB)
- Schedule C (Form 1040) Instructions: Line 13, Depreciation and Section 179