Business Depreciation Calculator
Calculate MACRS depreciation schedules, compare Section 179 vs bonus depreciation, and see vehicle depreciation with §280F luxury auto limits. Updated for 2026 OBBBA rules.
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How to Use This Calculator
Depreciation Schedule tab
The default tab. Enter your asset cost, select the asset type (5-year, 7-year, 15-year, 27.5-year, or 39-year property), and see the complete year-by-year MACRS depreciation schedule. Expand "More options" to switch between half-year and mid-quarter conventions or adjust your marginal tax rate.
Section 179 & Bonus tab
Compare three depreciation strategies side by side: regular MACRS (spread deductions over the asset's life), Section 179 expensing (deduct up to $1,250,000 in year 1), and 100% bonus depreciation (deduct the full cost in year 1). See year-1 tax savings and NPV comparison for each option.
Vehicle Depreciation tab
Calculate business vehicle depreciation with IRC §280F luxury auto limits. Enter the vehicle cost, GVWR (check the door sticker), and business use percentage. Heavy vehicles over 6,000 lbs bypass the luxury auto caps. Light vehicles are subject to annual deduction limits regardless of purchase price.
Share your result
Every input is encoded in the URL. Click Share to send your exact depreciation scenario to a CPA, business partner, or tax advisor.
The Formula
MACRS (Modified Accelerated Cost Recovery System) uses declining-balance methods that front-load depreciation deductions:
Tax Savings = Depreciation Deduction × Marginal Tax Rate
MACRS rates (half-year convention):
5-year (200% DB): 20%, 32%, 19.2%, 11.52%, 11.52%, 5.76%
7-year (200% DB): 14.29%, 24.49%, 17.49%, 12.49%, 8.93%, 8.92%, 8.93%, 4.46%
15-year (150% DB): 5%, 9.5%, 8.55%, 7.7%, 6.93%, 6.23%, ... 2.95%
27.5-year (SL): 3.636%/year
39-year (SL): 2.564%/year
Section 179 and 100% bonus depreciation allow you to deduct the entire cost in year 1 instead of spreading it over 5–39 years. The time value of money makes immediate deductions worth significantly more.
For vehicles under 6,000 lbs GVWR, IRC §280F caps annual depreciation regardless of the asset's cost. These “luxury auto limits” are adjusted for inflation annually.
Example
Apex Construction — $85,000 Excavator
Apex Construction bought an $85,000 excavator (5-year property) in March 2026. They want to compare depreciation strategies at a 24% marginal tax rate.
Section 179 & Bonus tab
By choosing Section 179 or 100% bonus depreciation, Apex saves $20,400 in year 1 vs $4,080 with regular MACRS — a $16,320 cash flow advantage in the first year.
Dr. Patel — $62,000 BMW X5 (GVWR 4,828 lbs)
Dr. Patel bought a $62,000 BMW X5 for her medical practice. The X5's GVWR is 4,828 lbs (under 6,000), so IRC §280F luxury auto limits apply.
Vehicle Depreciation tab
§280F limits cap the year-1 deduction at $20,400 (with bonus), not $62,000. The remaining $41,600 is depreciated at $7,160/year in years 4+, taking about 9 years to fully recover. If Dr. Patel had chosen an SUV over 6,000 lbs GVWR, she could deduct the full $62,000 in year 1.