MACRS Depreciation Calculator

About this calculator

MACRS (Modified Accelerated Cost Recovery System) is the depreciation method the IRS requires for most business assets placed in service after 1986, detailed in IRS Publication 946. Instead of depreciating an asset evenly over its life, MACRS front-loads larger deductions in the earlier years using a declining-balance method, then switches to straight-line depreciation partway through the recovery period once that produces a larger deduction.

Assets are grouped into IRS recovery classes based on their expected useful life — 3-year property (some tools), 5-year property (vehicles, computers, office equipment), 7-year property (office furniture, most other business equipment), and 10-year property, among others — and most businesses apply the half-year convention, which treats an asset as if it were placed in service exactly halfway through its first year regardless of the actual purchase date, giving a half-deduction in year one and a half-deduction in the final year.

Business owners and accountants use MACRS depreciation calculations every tax year to determine the deductible depreciation expense for a given asset and recovery year, often comparing it against Section 179 expensing or bonus depreciation as alternative ways to write off the same purchase faster.