MACRS Depreciation Calculator

IRS Publication 946: "How To Depreciate Property"
Please rotate to see calculator
Your device is too small to show this calculator.
Here are more calculators to select from.

What is depreciation?

IRS Publication 946, How To Depreciate Property, published February 14, 2024, explains it this way:

Depreciation is an annual income tax deduction that allows you to recover the cost or other basis of certain property over the time you use the property. It is an allowance for the wear and tear, deterioration, or obsolescence of the property.

In other words, it is the method by which a business can expense part of the cost of an asset each year over the asset's recovery period.

What is MACRS depreciation?

MACRS or Modified Accelerated Cost Recovery System is, in my opinion, a needlessly complicated system, designed by Congress and implemented by the IRS, for depreciating the cost of assets. MACRS replaced ACRS (Accelerated Cost Recovery System) in 1986.

This MACRS Depreciation Calculator supports nearly all the nuances and conventions of the Internal Revenue Code. It includes support for qualified and listed assets including most motor vehicles. While the calculator is capable of depreciating nearly any asset, if you want to use it correctly, you'll need to familiarize yourself with Publication 946 (linked above).

There's a lot more below

Please rotate to see calculator
Your device is too small to show this calculator.
Here are more calculators to select from.

Recent changes and enhancements

  • Feb. 2024: Updated maximum vehicle depreciation amounts for Tax Year 2023. Calculator currently supports maximum depreciation calculations on vehicles that weight 6,000 lbs. or less.
  • Dec. 2023: Export depreciation schedule's data to Excel/xlsx file. Click on "Print Preview" for access to this feature.
  • Dec. 2023: Save schedule to Word/docx file. Saving to a .docx gives you the opportunity to alter the style of the schedule, to add notes, or incorporate the schedule into a report.

With all other calculators on this site, I attempt to provide detailed instructions for their use. That is impossible when it comes to using the MACRS Depreciation Calculator. As mentioned, the writers of the IRC (Internal Revenue Code) have made the subject of depreciation needlessly complicated. While depreciation arithmetic is rather simple — it can be explained in about half a page, the rules governing depreciation cover nearly 100 pages (spread across multiple publications). Please confirm your understanding (and mine!) of how to apply depreciation rules with an income tax professional before filing a tax return.

Though I have been studying depreciation since before there was MACRS (1986), I am most certainly NOT an income tax professional.

Nonetheless, below is some general guidance on the calculator's use. Much of it comes directly from IRS Publication 946.


A special note about automobile depreciation. In February 2019, the IRS published a revenue procedure that "provides a safe harbor method of accounting for determining depreciation deductions for passenger automobiles." I point this out, because there is no mention of the safe harbor details in Publication 946 (as of the edition published in early 2024 "for use in preparing 2023 returns"). Applying the safe harbor rules results in significantly different depreciation deductions. As of April 13, 2020, this calculator supports the safe harbor depreciation procedure. A special thank you goes out to Robert Valentine, CPA, for pointing this out to me. Robert publishes a depreciation calculator for Windows. (I've not used it.)


What Property Can Be Depreciated?

IRS Pub. 946 p.4:

You can depreciate most types of tangible property (except land), such as buildings, machinery, vehicles, furniture, and equipment. You also can depreciate certain intangible property, such as patents, copyrights, and computer software.
  • It must be property you own.
  • It must be used in your business or income-producing activity.
  • It must have a determinable useful life.
  • It must be expected to last more than one year.

Options, settings, and inputs explained

Basis - The basis is frequently the cost of the asset. Frequently, but not always. The basis for real estate is always different than the contract purchase price. If you are depreciating property, you must deduct the value of the land. But, you also add to the basis your settlement costs. For example (Pub. 946 p 12):

  • Legal and recording fees.
  • Abstract fees.
  • Survey charges.
  • Owner's title insurance.
  • Amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for

Business Use - If the asset is not used entirely for business, enter the percentage that is for business use. If you enter $100,000 for basis and business use is 80%, then the basis for depreciation (adjusted basis) is $80,000. (The calculator makes this calculation of course.)

Asset Being Depreciated - This has no impact on the calculation. It is included here so that when you print a schedule, it will include the identity of the asset.

Placed Into Service - The date when the asset is available for use. You should note that the business does not have to be using the asset. As long as it is available, the asset is in service.

179 Deduction - The basis is lowered by any 179 deduction that you take.

IRS Pub. 946 p.2:

What’s New for 2023

Section 179 deduction dollar limits. For tax years beginning in 2023, the maximum section 179 expense deduction is $1,160,000. This limit is reduced by the amount by which the cost of section 179 property placed in service during the tax year exceeds $2,890,000.
Also, the maximum section 179 expense deduction for sport utility vehicles placed in service in tax years beginning in 2023 is $28,900.

IRS Pub. 946 p.15:

You can elect to recover all or part of the cost of certain qualifying property, up to a limit, by deducting it in the year you place the property in service. This is the section 179 deduction. You can elect the section 179 deduction instead of recovering the cost by taking depreciation deductions.

Class Life / Recovery Period -

IRS Pub. 946 p.31:

The recovery period of property is the number of years over which you recover its cost or other basis. It is determined based on the depreciation system (GDS or ADS) used.

The recovery periods available is determined by the depreciation method selected. The calculator automatically limits the choice of recovery periods to the ones that are appropriate for the method selected.

In general, recovery periods are longer under ADS than they are under GDS.

Depreciation Method - Currently, the taxpayer may select from one of four depreciation methods. Three methods fall under GDS and one under ADS. Two GDS methods use a declining balance equation that has the effect of accelerating the tax benefit.

IRS Pub. 946 pp. 26-27

The Modified Accelerated Cost Recovery System (MACRS) is used to recover the basis of most business and investment property placed in service after 1986. MACRS consists of two depreciation systems, the General Depreciation System (GDS) and the Alternative Depreciation System (ADS). Generally, these systems provide different methods and recovery periods to use in figuring depreciation deductions.

Which Depreciation System (GDS or ADS) Applies?

Your use of either the General Depreciation System (GDS) or the Alternative Depreciation System (ADS) to depreciate property under MACRS determines what depreciation method and recovery period you use. You generally must use GDS unless you are specifically required by law to use ADS or you elect to use ADS.

IRS Convention - The three conventions establish when the recovery period begins and ends.

IRS Pub. 946 p.33

The mid-month convention: Under this convention, you treat all property placed in service or disposed of during a month as placed in service or disposed of at the midpoint of the month. This means that a one-half month of depreciation is allowed for the month the property is placed in service or disposed of.
The mid-quarter convention: Under this convention, you treat all property placed in service or disposed of during any quarter of the tax year as placed in service or disposed of at the midpoint of that quarter. This means that one and one-half months of depreciation is allowed for the quarter the property is placed in service or disposed of.
The half-year convention: Under this convention, you treat all property placed in service or disposed of during a tax year as placed in service or disposed of at the midpoint of the year. This means that a one-half year of depreciation is allowed for the year the property is placed in service or disposed of.

Special Allowance - calculated. "Qualified Asset" must be set to "Yes" (see below).

IRS Pub. 946 p.23

You can take a special depreciation allowance to recover part of the cost of qualified property (defined next), placed in service during the tax year. The allowance applies only for the first year you place the property in service. The allowance is an additional deduction you can take after any section 179 deduction and before you figure regular depreciation under MACRS for the year you place the property in service.

Qualified Asset - if your asset is a qualified asset, select the special allowance including the new 100% bonus depreciation.

Your property is qualified property if it is one of the following:

  • Qualified reuse and recycling property. 50% special allowance.
  • Qualified second generation biofuel plant property. 50% special allowance.
  • Certain qualified property acquired before September 28, 2017. 30% special allowance, unless it is certain property with a "long production period" or "certain aircraft," then you can take a 40% special depreciation allowance.
  • Certain qualified property acquired after September 27, 2017. 100% special allowance.
  • Certain plants bearing fruits and nuts. 100% special allowance.

Is Asset a Vehicle? - when "Yes", it activates the many rules pertaining to vehicle depreciation, including maximum depreciation deductions.

Type of Vehicle - The vehicle type impacts the amount of the maxiumum depreciation that a taxpayer can deduct each year prior to 2018. After 2017, the maximum depreciation amount is the same for all vehicles. In 2019, the IRS issued a safe harbor ruling for vehicles. If you selects qualified asset 100% bonus depreciation then you should probably select safe harbor rules. But be careful. There are exceptions. For example, you can't select 100% bonus depreciation and have a 179 expense deduction too.

Listed Asset -

IRS Pub. 946 p.51

Listed property is any of the following:

  • Passenger automobiles (as defined later).
  • Any other property used for transportation, unless it is an excepted vehicle.
  • Property generally used for entertainment, recreation, or amusement (including photographic, phonographic, communication, and video recording equipment).

Note: The calculator will not create an accurate schedule that incorporates a short tax year.

IRS Pub. 946 p.43

A short tax year is any tax year with less than 12 full months. This section discusses the rules for determining the depreciation deduction for property you place in service or dispose of in a short tax year. It also discusses the rules for determining depreciation when you have a short tax year during the recovery period (other than the year the property is placed in service or disposed of).

Even with short tax year ommission, I trust that users will find the MACRS Depreciation Calculator helpful. As always, feel free to leave your comments and questions below. Your comments are one of the metrics I use to determine what enhancements or calculators I offer next.

64 Comments on “Macrs Depreciation Calculator”

Join the conversation. Tell me what you think.
  • MONICA WILLIAMS says:

    First, I am glad I found this site. It seems you are very helpful. My problem is I LITERALLY DO NOT UNDERSTAND ANY OF THIS. I have a take home test and I cannot understand to what I am doing or the §179, etc. This is a take home test for a class I have in college (just to become familiar with taxation). How do I calculate:
    On July 2, 2018 purchased a commercial building $600,000 and purchased a residential building Jun 15, 2018 $400,000. What is total depreciation for both buildings in 20198 and 2019 using the MACRS.

    • What part don’t you understand? Did you read the text on this page?

      As to finding the total. I would approach it by calculating the depreciation for each building and then adding them together. But I would be careful. Only because normally, residential buildings are not depreciated. So that part might be a trick. 🙂

  • How do you decide if asset is 7 or5 yr property?
    Specifically, a new HVAC unit for a rental condo

  • if i brought a house in California en 2017 for 120.000. with S/L method how much I can depreciate annually. in my taxes 2018

    • I don’t answer tax questions. It’s not appropriate. For one thing, in the US, often tax questions can’t be answered in isolation. Meaning, the answer depends on other variables. (I assume, the house isn’t your primary residence and that it’s an income producing property? If it isn’t, then you most likely can’t depreciate it.)

  • Thanks very much… but would be good if you could include calculation for the year of disposal as well.

    • You’re welcome. My intention is to show all the years. If you click calc with the calculator’s defaults, the basis is $1,000 and the accumulated depreciation is $1,000. There’s nothing left to show.

      You must have found a bug. Can you tell me what your inputs were that you were using?

      • Sorry should have been more specific… as an example, I acquired a property in may 2015. I depreciated it according to your MCARS calculator in ’15, ’16, ’17. In 2018 however I sold the property however in May 2018. In this case, using the mid-month convention, I can (for 2018) depreciate (I believe!) 5.5/12 of a normal full year depreciation (May being month 5 + half month 0.5 = 5.5/12). It’s a simple calculation, but I just thought you may want to include it in your calculator. Rgds.

        • I see your point. I’ll certainly try to add a sold date with next update (hopefully this year). Thanks for the suggestion.

  • Hi there. I’m trying to calculate a Vehicle, however I get an error.

    Not a valid “Placed into Service Date” for vehicles. Supports years 2005-2016.

    The vehicle in question is a work truck 2019.
    The other vehicle is a forklift 2018.

    • Thank you Kimberly for bringing this to my attention. I’ll take a look and try to get it fixed in the next week. Sorry for the delay.

    • I updated the MACRS depreciation calculator with the maximum depreciation amounts for vehicles. So you won’t get the error about not supporting years after 2016.

  • I have a single family residential rental property I rented out for 214 days in 2019. My cost basis purchase price plus improvements to rent is $406,983. Can I use that gross amount to depreciate or do I need to deduct land value according to tax bill of $33,236? This rental property supplements my social security income; my gross income will be less than $45,000. Tax preparers want $450 to $700 to prepare my tax return. Your input would be greatly appreciated.

    • While you may appreciate my input, it is most likely to be wrong, and therefore, it could cost you a lot more than $450 or $700 in penalties and interest!

      Sorry, but I’m not qualified to answer such tax questions.

  • Question, what if business use % is different each year?

    2017 First Year was 53%as I just started drumming up business and
    2018 was 78% and 2019 was 80%.

    • Rick, sorry, but I don’t know. I never researched this possibility. As you can see, the calculator is not designed to handle such a scenario.

  • $80,000 vehicle, listed 20% business use.
    No section 179 or bonus depreciation
    Should be ADS SL but keep getting a warning I should use SL depreciation. GDS SL tells me to use ADS.

    thanks

    • Thank you for taking the time to let me know. I’ll try to get it fixed in the coming week.

    • Dan, I fixed the issue so that ADS SL now works with vehicles.

      I did some testing using your example, and I was surprised that it hits the IRS maximum depreciation amounts (when adjusted by business used percentage) allowed for vehicles in year 3. I mention this because the depreciation results will not appear to be using a straight-line method.

      If you do not see the change right away, you may have to perform a hard refresh of the page:

      Depending on your operating system all you need to do is the following key combination:

      • Windows: ctrl + F5
      • Mac/Apple: Apple + R or command + R
      • Linux: F5

      Above, from Refresh Your Cache.

  • Bob Valentine says:

    Hi Karl,
    The 2019 maximum depreciation amounts for Luxury Autos is:
    Year 1: $18.100
    Year 2: $16,100
    Year 3: $9,700
    Year 4+: $5,760
    I suggest that you update your calculator for 2019. Currently, it is only correct through 2018.

    • Thanks for reminding me, Bob. I checked in early February and Publication 946 was not available. Then I forgot about it. I should have it updated by the weekend. I need to fix a problem when the business use of a vehicle is less than 50%.

    • Hi Bob, I have updated the maximums for 2019 TY. Thank you for reminding me. (I see that I did have a comment on the page about the maximums being for 2018.)

      If you do not see the change right away, you may have to perform a hard refresh of the page:

      Depending on your operating system all you need to do is the following key combination:

      • Windows: ctrl + F5
      • Mac/Apple: Apple + R or command + R
      • Linux: F5

      Above, from Refresh Your Cache.

      • Robert Valentine says:

        The problem is that the calculator is not reducing the cost basis by the amount of the Special Allowance before calculating depreciation in the year 2020 in the example in my prior post above.

        • Thank you for this. You are absolutely right (but only when the calculator is set to vehicle and qualified asset).

          The calculator now adjusts the basis by the special allowance, however, unfortunately, I do not get the same results you get. Either there is something else wrong in my calculation, which I would think would have been detected by other users (and my tests have matched Pub. 946) or you have an error. Since your depreciation numbers are lower than mine, I was wondering if you were adjusting the first year by both the special allowance and the depreciation that would have been deducted had there been no depreciation?

          I’ll test mine some more (the problem I have, is I do not see an example in the IRS publication for an auto with special allowance and the SA being over the maximum allowed), but I figured I may as well post the code change, since the SA did need to be deducted.

  • Robert Valentine says:

    Karl,
    I think something is wrong with the calculation of depreciation for Autos acquired in 2019. I have entered the following data:
    Cost: $40,000
    Business Use: 100%
    Placed In Service: 03/11/2019
    Class Life: 5
    Depreciation Method: GDS 200% DB
    IRS Convention: Half-Year
    Qualified Asset: Yes
    Is Asset a Vehicle: Yes
    Listed Asset: Yes
    Type of Vehicle: Automobile
    Indian Reservation Property: No

    The Schedule SHOULD give the following resluts:
    Special Allowance $18,100
    2020: $7,008
    2021: $4,205
    2022: $2,523
    2023: $2,523
    2024: $1,261
    2025: $4,380

    However, your calculator gives the following results:
    Special Allowance $18,100
    2020: $16,000
    2021: $9,600
    2022: $5,760
    2023: $5,760
    2024: $2880
    2025: $0

    As you can see, your calculator would depreciation the asset $40,000 plus the special allowance of $18,100. And I did the Ctrl+F5 to refresh the page.

Comments, suggestions & questions welcomed...

Your email address is not published. I use it only to notify you of a reply.

Let me know if you have a website. I might like to visit it.

* Required