Business Depreciation Calculator
Calculate annual depreciation for business assets using different methods
About this calculator
The Business Depreciation Calculator helps business owners and accountants determine the annual depreciation expense for assets using various IRS-approved methods including straight-line, double-declining balance, and MACRS. This tool is essential for accurate financial reporting, tax preparation, and budgeting decisions. By calculating depreciation correctly, businesses can maximize tax deductions, maintain proper book values, and make informed decisions about asset replacement and capital investments.
How to use
Enter your asset's initial cost, estimated useful life, and salvage value. Select your preferred depreciation method from the dropdown menu (straight-line, declining balance, or MACRS). Click calculate to view the annual depreciation schedule, showing yearly depreciation amounts and remaining book values for tax and accounting purposes.
Frequently asked questions
What depreciation method should I use for tax purposes?
Most businesses use MACRS for tax reporting as it's required by the IRS for most business assets placed in service after 1986.
Can I change depreciation methods after starting?
Generally no, you must continue using the same method throughout the asset's life unless you receive IRS approval for a change.
What's the difference between book and tax depreciation?
Book depreciation follows accounting standards (often straight-line), while tax depreciation follows IRS rules (typically MACRS) for maximum deductions.