Depreciation Calculator
Build a year-by-year depreciation schedule by straight-line or double-declining balance for your books, or by MACRS (GDS, half-year convention) for business property on a US tax return.
Straight-line depreciation is the cost minus the salvage value, divided by the useful life. A $58,000 machine expected to be worth $10,000 after 5 years depreciates $9,600.00 a year. Double-declining balance front-loads it: $23,200.00 in the first year. For a US tax return, business property usually follows MACRS instead.
This calculator shows depreciation arithmetic for general planning; it is not financial advice, and not tax or accounting advice. The MACRS mode covers only GDS property with the half-year convention at full business use, and leaves out the mid-quarter and mid-month conventions, real property, section 179, special depreciation allowances, listed property limits and short tax years. Book depreciation methods and lives are your own accounting choices. Ask a tax professional or accountant which rules apply to your property before you file.
Book depreciation for your own records. Salvage value is what you expect the asset to be worth at the end of its life.
First-year depreciation
$9,600.00
$48,000.00 depreciated over 5 years
| Year | Depreciation | Accumulated | Book value |
|---|---|---|---|
| 1 | $9,600.00 | $9,600.00 | $48,400.00 |
| 2 | $9,600.00 | $19,200.00 | $38,800.00 |
| 3 | $9,600.00 | $28,800.00 | $29,200.00 |
| 4 | $9,600.00 | $38,400.00 | $19,600.00 |
| 5 | $9,600.00 | $48,000.00 | $10,000.00 |
Each year is rounded to the cent; the last year absorbs the rounding.
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About the Depreciation Calculator
Depreciation spreads an asset's cost over the years it is used, and the method decides how much lands in each year. Straight-line is the even split: take the cost, subtract what you expect to sell it for at the end (the salvage value), and divide by the useful life. The $58,000 press in the accounting text credited below, with $10,000 of salvage over 5 years, comes to $9,600.00 a year, $48,000.00 in all. Double-declining balance applies twice the straight-line rate to whatever book value is left, so the same press loses $23,200.00, $13,920.00 and $8,352.00 in its first three years. In year four it stops at $2,528.00, because depreciation never takes the book value below the salvage value. Tax depreciation follows its own rules. Under MACRS, a recovery period set by the type of property replaces the useful life, salvage is ignored, and the half-year convention gives only half a year in the first year. The worked example in the tax guidance credited below, 5-year property costing $1,000, gives $200.00, $320.00, $192.00, $115.20, $115.20 and $57.60, spread over six tax years.
Frequently asked questions
How do you calculate straight-line depreciation?+
Subtract the salvage value from the cost and divide by the useful life in years. ($58,000 - $10,000) / 5 = $9,600.00 a year, until the book value reaches the $10,000 salvage value.
How does double-declining balance work?+
Divide 2 by the useful life to get the rate (40% for 5 years), then apply it each year to the book value at the start of that year. On a $58,000 asset that is $23,200.00 in year one and $13,920.00 in year two, never going below the salvage value; anything still above it comes off in the last year.
Why does 5-year MACRS property take six years?+
The half-year convention treats property as placed in service at the middle of the year, so the first and last tax years each get half a year. $1,000 of 5-year property gets $200.00 in the first year and $57.60 in the sixth.
Why don't my MACRS numbers match the published percentage tables exactly?+
This calculator figures each year with the declining balance and straight-line rules and rounds to the cent, which the tax guidance allows. The published tables round the percentages, so the two can differ slightly.
MACRS declining balance, straight line switch and half-year convention: IRS Publication 946, How To Depreciate Property, chapter 4. Straight-line and double-declining-balance book depreciation: OpenStax, Principles of Accounting, Volume 1, section 11.3.
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