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MACRS depreciation calculator
Work out the depreciation deduction for each tax year under the Modified Accelerated Cost Recovery System, using the IRS percentage tables. Choose the property class, the convention and when it went into service, then download the schedule as a CSV or share it as a link.
Depreciation by year
Depreciation schedule
How MACRS depreciation is calculated
MACRS is how most business property placed in service after 1986 is depreciated on a US federal tax return. You don’t choose a useful life or a salvage value. The IRS assigns each kind of property a recovery period, and publishes the percentage of its basis to deduct in each tax year.
Deduction for the year = depreciable basis × the table percentage for that year
A $25,000 machine is 7-year property. Under the half-year convention it is depreciated at 14.29% in the first year, $3,572.50, then 24.49%, $6,122.50, and so on for eight tax years until the whole $25,000 has been deducted. The calculator rounds each year to the cent and lets the last year take what is left, the way Form 4562 is filled in.
The depreciable basis is usually what you paid, including sales tax, delivery and installation, times the share of business use, less any Section 179 deduction or bonus depreciation you claim first.
MACRS depreciation table: half-year convention
These are the percentages from Table A-1 of IRS Publication 946, used for property other than buildings when the mid-quarter convention doesn’t apply. A 5-year asset is deducted over six tax years because the first and last each count as half a 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% |
Which property class is my asset?
The class comes from the asset class tables in Appendix B of Publication 946. Some common examples:
- 3-year
- Tractor units for over-the-road use, qualified rent-to-own property, and some special manufacturing tools.
- 5-year
- Computers and peripherals, office machines such as copiers, cars, light trucks, equipment used in construction, and new farm machinery.
- 7-year
- Office furniture and fixtures, machinery in many manufacturing activities, used farm machinery, and any property without a class life.
- 10-year
- Vessels and barges, single-purpose agricultural structures, and fruit or nut trees.
- 15-year
- Land improvements such as fences, parking lots and landscaping, qualified improvement property, and restaurant property.
- 20-year
- Farm buildings other than single-purpose structures, and municipal sewers.
- 27.5-year
- Residential rental property. Straight-line, mid-month convention.
- 39-year
- Nonresidential real property, such as offices and warehouses. Straight-line, mid-month convention.
Equipment is often classed by the activity it is used in rather than what it is, so a forklift in a warehouse and one at a factory can differ. Search for your property in the MACRS asset class lookup to find its recovery period, then choose that class above.
Half-year, mid-quarter and mid-month
- Half-year is the usual convention for equipment, vehicles and furniture: everything is treated as going into service halfway through the year.
- Mid-quarter replaces it for the whole year when more than 40% of the basis of the property you placed in service that year went into service in the last three months. Each asset is then treated as placed in service in the middle of its quarter, and the calculator uses the month you enter to pick the quarter’s table.
- Mid-month always applies to residential rental and nonresidential real property.
The calculator uses the General Depreciation System and a calendar tax year. It doesn’t handle the Alternative Depreciation System, short tax years, listed property used 50% or less for business, or disposals. Check your figures with a tax professional before you file. For your own books rather than the tax return, the depreciation calculator also does straight-line, declining balance and sum-of-years’ digits.
MACRS calculator FAQ
Find the property’s recovery period from its asset class, decide the convention (usually half-year), then multiply the depreciable basis by the IRS table percentage for each year. For 5-year property under the half-year convention the percentages are 20%, 32%, 19.2%, 11.52%, 11.52% and 5.76%.
The half-year convention treats property as placed in service in the middle of the first year, so only half a year’s depreciation is allowed then. The other half falls in a sixth tax year.
No. MACRS depreciates the whole basis down to zero over the recovery period. Salvage value only matters for book depreciation methods such as straight-line.
The General Depreciation System is what most property uses, with the accelerated percentages in this calculator. The Alternative Depreciation System uses longer, straight-line recovery periods and is required for some property, such as listed property used 50% or less for business. This calculator uses GDS.
The tables in Appendix A of IRS Publication 946. The calculator applies them to the basis as Form 4562 does, rounding each year to the cent and letting the final year take what is left.
Keep cost and depreciation on the asset record
AssetCenter records each asset’s cost, acquisition date and useful life with who has it, where it is and what it has cost to keep, and calculates straight-line book depreciation. It doesn’t replace your tax software. Free for up to 25 assets.