MACRS Depreciation Calculator United States

What the MACRS depreciation calculator does

The calculator estimates how much of a business asset's cost you can deduct each year for federal tax. MACRS, the Modified Accelerated Cost Recovery System, is the depreciation method the IRS requires for most tangible property placed in service after 1986. The tool uses the General Depreciation System (GDS) with the half-year convention, the default for most assets a small business buys.

Depreciation spreads the cost of equipment over its recovery period instead of deducting it all in the year of purchase. MACRS front-loads the deductions, so you recover more of the cost in the early years. The calculator returns the depreciation for the recovery year you select, the first-year deduction, the accumulated depreciation through that year and the remaining basis.

How MACRS depreciation works

Every asset goes into a recovery class based on how long the IRS expects it to be useful. Common GDS classes are 3, 5, 7, 10, 15 and 20-year property. Each class has a fixed table of annual percentages that already includes the switch from the declining-balance method to straight-line at the point where straight-line gives the larger deduction.

A year's depreciation is the depreciable cost, or basis, times the percentage for that class and year:

• Year depreciation = cost × MACRS percentage for the class and year.
• Accumulated depreciation = cost × the sum of the percentages up to and including that year.
• Remaining basis = cost − accumulated depreciation.

The percentages for each class add up to 100%, so the asset is fully depreciated at the end of its recovery period and the remaining basis is zero.

Why the recovery period is longer than the class name

Under the half-year convention the IRS assumes every asset is placed in service in the middle of the year, whatever month you bought it. You claim half a year of depreciation in the first year and the other half in an extra final year, so a 5-year class is spread across six tax years and a 7-year class across eight.

You do not have to track the exact purchase date of every item. When you pick a class, the calculator reports a total recovery period one year longer than the class name, with a half year at the start and the end.

Choosing the correct recovery class

The class determines the whole schedule, so it is the input to get right. Publication 946 and its tables list the class for each asset type. As a general guide:

• 3-year property includes certain tools and tractor units.
• 5-year property includes cars, light trucks, computers and office machinery.
• 7-year property includes office furniture, fixtures and most machinery and equipment.
• 15-year property includes land improvements such as fences, sidewalks and landscaping.
• 20-year property includes certain farm buildings and municipal improvements.

Real estate uses longer straight-line periods of 27.5 or 39 years and is not covered by these half-year tables. If you are unsure of an asset's class, check the IRS classification before relying on the result.

Reading your results

The calculator highlights the depreciation for the recovery year you select, so you can check any year of the schedule. It also shows the first-year deduction, which affects the current year's taxable income.

Accumulated depreciation is how much of the cost you have written off so far, and the remaining basis is what is left. Basis also determines your gain or loss if you sell the asset. Depreciation reduces basis, which can create depreciation recapture taxed on sale, so keep an accurate running total.

What you need to enter

• The depreciable cost of the asset, generally what you paid plus the costs of placing it in service.
• The recovery class the IRS assigns to that type of asset.
• The recovery year you want to inspect, starting at year one.

If you claim Section 179 expensing or bonus depreciation first, reduce the cost you enter by those amounts, since MACRS applies only to the basis left after them. Entering the full cost would overstate the regular depreciation.

When to use this tool

• Estimate a first-year depreciation deduction before filing.
• Build a full year-by-year schedule for a piece of equipment.
• Track the remaining tax basis on an asset you own.
• Compare how different recovery classes spread deductions over time.

Section 179 limits and bonus depreciation rates can change from year to year, so confirm the current figures and the right class for each asset. The final treatment of any asset depends on your facts, so check the details with a tax professional.

This is general information only and not financial advice.

About This MACRS Depreciation Calculator

Use this MACRS depreciation calculator to get an instant, accurate estimate. The figures follow official IRS guidance and every rate and threshold is kept up to date for 2026. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.