Finance Calculator
MACRS Depreciation Calculator
Build a full year-by-year IRS depreciation schedule for any asset. Choose the property class, convention and placed-in-service date to get each year's rate, deduction, accumulated depreciation and remaining book value — using the published percentages from Publication 946.
MACRS Depreciation Calculator
IRS year-by-year depreciation schedule
After any Section 179 or bonus depreciation
Cars, trucks, computers, office machinery · 200% Declining Balance
The default for personal property — a half year in the first and last years.
Not used by half-year
Labels the schedule
Only the business share is depreciable
First-year deduction
$2,000.00
20.00% rate
over 6 tax years
Results
Enter the asset details to see results
Understanding MACRS
The Modified Accelerated Cost Recovery System is the depreciation method required for most business property placed in service after 1986. Rather than spreading cost evenly, it front-loads the deduction — a 5-year asset claims 20% in year one and 32% in year two, then tapers.
In practice the arithmetic is simple: Depreciation = Basis × Rate. The work is choosing the right rate, which depends on three things — the property class, the depreciation method, and the convention that decides how much of the first year you get.
Those rates come from IRS percentage tables, not from a formula you apply yourself. The tables already bake in the switch from declining balance to straight line, and they are rounded so each column sums to exactly 100%.
MACRS Formulas
1. Annual Depreciation
2. Depreciable Basis
3. Accumulated and Book Value
Property Classes and Methods
Each class carries its own recovery period and method. The 3 through 10-year classes use 200% declining balance, the 15 and 20-year classes use 150%, and real property is straight line:
| Class | Method | Year 1 | Typical Assets |
|---|---|---|---|
| 3-year | 200% DB | 33.33% | Tractor units, certain tools |
| 5-year | 200% DB | 20.00% | Cars, trucks, computers |
| 7-year | 200% DB | 14.29% | Office furniture, fixtures |
| 10-year | 200% DB | 10.00% | Vessels, fruit trees |
| 15-year | 150% DB | 5.00% | Land improvements, fences |
| 20-year | 150% DB | 3.75% | Farm buildings, sewers |
| 27.5-year | Straight line | 3.485% | Residential rental buildings |
| 39-year | Straight line | 2.457% | Offices, retail, warehouses |
Year-1 rates for real property assume a January placement; they fall sharply for later months. Declining-balance classes switch to straight line partway through, which the published tables already handle.
The Half-Year Percentage Tables
These are the IRS Table A-1 rates, the ones most assets use. Every column sums to exactly 100%:
| Year | 3-yr | 5-yr | 7-yr | 10-yr | 15-yr |
|---|---|---|---|---|---|
| 1 | 33.33 | 20.00 | 14.29 | 10.00 | 5.00 |
| 2 | 44.45 | 32.00 | 24.49 | 18.00 | 9.50 |
| 3 | 14.81 | 19.20 | 17.49 | 14.40 | 8.55 |
| 4 | 7.41 | 11.52 | 12.49 | 11.52 | 7.70 |
| 5 | — | 11.52 | 8.93 | 9.22 | 6.93 |
| 6 | — | 5.76 | 8.92 | 7.37 | 6.23 |
| 7 | — | — | 8.93 | 6.55 | 5.90 |
| 8 | — | — | 4.46 | 6.55 | 5.90 |
| Total | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 |
The 7-year column is worth a second look. Years 5 to 7 read 8.93 / 8.92 / 8.93 when the underlying rate is an identical 8.9249% for all three. Rounding them all down would leave the column at 99.98%, so the IRS adds the missing two-hundredths back on alternating years. The 10-year and 15-year columns do the same thing.
Conventions Decide Your First Year
MACRS does not care what date you actually bought the asset. Instead a convention assigns a deemed placed-in-service point, and that sets how much of year one you can claim. The same $10,000 asset in the 5-year class:
| Convention | Year-1 Rate | Year-1 Deduction | When It Applies |
|---|---|---|---|
| Half-Year | 20.00% | $2,000.00 | The default for personal property |
| Mid-Quarter, Q1 | 35.00% | $3,500.00 | Jan–Mar, when the 40% test is met |
| Mid-Quarter, Q2 | 25.00% | $2,500.00 | Apr–Jun |
| Mid-Quarter, Q3 | 15.00% | $1,500.00 | Jul–Sep |
| Mid-Quarter, Q4 | 5.00% | $500.00 | Oct–Dec |
Mid-quarter is not optional. It is required when more than 40% of the year's personal property was placed in service in the final quarter — a rule designed to stop businesses buying equipment in December and claiming half a year of depreciation on it. When triggered, it applies to every asset placed in service that year, not just the Q4 ones.
Real Property and the Mid-Month Convention
Buildings always use mid-month, which prorates to the half-month. On a $275,000 residential rental, the month of purchase changes the first-year deduction by more than $9,000:
| Placed in Service | 27.5-yr Rate | Year-1 on $275,000 | 39-yr Rate |
|---|---|---|---|
| January | 3.485% | $9,583.75 | 2.457% |
| March | 2.879% | $7,917.25 | 2.030% |
| June | 1.970% | $5,417.50 | 1.389% |
| September | 1.061% | $2,917.75 | 0.748% |
| December | 0.152% | $418.00 | 0.107% |
A January placement claims 11.5 of 12 months; a December one claims half a month. The difference on this building is $9,165.75 in year one — though nothing is lost overall, since the remainder simply rolls into an extra year at the end.
Benefits of Using the MACRS Calculator
Example Calculations
Three assets worked through step by step:
Example Scenario 1 — 5-Year Property, Half-Year
Asset cost $10,000, 5-year class, 200% declining balance.
Year 1: $10,000 × 20.00% = $2,000
Year 2: $10,000 × 32.00% = $3,200
Year 3: $10,000 × 19.20% = $1,920
Year 4: $10,000 × 11.52% = $1,152
Year 5: $10,000 × 11.52% = $1,152
Year 6: $10,000 × 5.76% = $576
Total = $10,000 over 6 tax years, book value $0
Example Scenario 2 — 7-Year Property
Asset cost $50,000, 7-year class, half-year convention.
Year 1: $50,000 × 14.29% = $7,145
Year 2: $50,000 × 24.49% = $12,245
Year 3: $50,000 × 17.49% = $8,745
Years 5–7 read 8.93% / 8.92% / 8.93% — the IRS spreading the rounding
Year 8: $50,000 × 4.46% = $2,230
Total = $50,000 over 8 tax years
Example Scenario 3 — 27.5-Year Residential Rental
Building basis $275,000, placed in service January, mid-month.
Straight line over 27.5 years, mid-month convention
A full year would be $275,000 ÷ 27.5 = $10,000
Year 1: $275,000 × 3.485% = $9,583.75 (11.5 months, not 12)
Years 2–27: $275,000 × 3.636% = $9,999.00 each
Year 28: $275,000 × 1.970% = $5,417.50
Total = $275,000 over 28 tax years
What This Calculator Does Not Cover
This produces a standard MACRS GDS schedule and nothing more. It does not handle Section 179 expensing or bonus depreciation, both of which are claimed first and reduce the basis you enter here. It does not apply the annual dollar limits on passenger vehicles, which can cap the deduction well below the table amount. It does not cover the Alternative Depreciation System, required for listed property used 50% or less for business, for most property used outside the United States, and for certain farming and tax-exempt-use property. Nor does it handle a disposal part-way through the recovery period, where a further convention applies in the year of sale, or the recapture that may follow. Land is never depreciable, so for a building purchase only the improvement portion of the price belongs here. Property classification itself is often the hardest part and the easiest to get wrong. Confirm the class, the convention test and your eligibility with a tax professional before filing. This is general information, not tax advice.
Frequently Asked Questions
- What is MACRS depreciation?
- The Modified Accelerated Cost Recovery System is the depreciation method required for most business property placed in service after 1986. Rather than spreading cost evenly, it front-loads the deduction using IRS percentage tables, so a 5-year asset claims 20% in year one and 32% in year two.
- How do you calculate MACRS depreciation?
- Multiply the depreciable basis by the IRS percentage for that year. A $10,000 asset in the 5-year class takes $10,000 × 20.00% = $2,000 in year one. The percentage depends on the property class, the method and the convention, all of which are published in IRS Publication 946.
- Why does a 5-year asset take 6 years to depreciate?
- The half-year convention treats every asset as placed in service at the midpoint of the year, regardless of the actual date. That gives half a year of depreciation in year one, and the missing half rolls into an extra year at the end. A 7-year asset spans 8 tax years for the same reason.
- Which convention applies to my asset?
- Half-year is the default for personal property. Mid-quarter is required instead if more than 40% of the year's personal property was placed in service in the final quarter. Real property — the 27.5 and 39-year classes — always uses mid-month and never the other two.
- What does the mid-quarter convention do?
- It treats assets as placed in service at the midpoint of their quarter rather than the year. For 5-year property the first-year rate becomes 35% for Q1, 25% for Q2, 15% for Q3 and 5% for Q4 — so a late purchase gets much less first-year depreciation than the 20% half-year figure.
- Why are the 7-year rates uneven at 8.93%, 8.92%, 8.93%?
- Rounding. The true rate for those years is 8.9249%, and rounding all of them to 8.92% would leave the column summing to 99.98% rather than 100%. The IRS distributes the two-hundredths across alternating years so the asset depreciates to exactly zero. Applying the published rate is what produces the figures on Form 4562.
- How does business use affect the deduction?
- Only the business share is depreciable, so 60% business use on a $10,000 asset gives a $6,000 basis and a $1,200 first-year deduction instead of $2,000. Listed property used 50% or less for business cannot use these accelerated tables at all — it must use straight line under the Alternative Depreciation System.
- Why does the month matter for rental property?
- Mid-month treats the building as placed in service halfway through its month. A January placement claims 11.5 of 12 months in year one, giving 3.485%, while a December placement claims only half a month, giving 0.152%. On a $275,000 building that is $9,583.75 against $418.
- What is the difference between 27.5 and 39-year property?
- Residential rental property uses 27.5 years; nonresidential real property such as offices, retail and warehouses uses 39 years. Both are straight line with the mid-month convention. Land is never depreciable, so only the building portion of a purchase price enters the calculation.
- Does this include Section 179 or bonus depreciation?
- No. Those are claimed before the MACRS tables are applied and reduce the basis you enter here. If you expense $30,000 of a $50,000 asset under Section 179, the remaining $20,000 is what gets depreciated using these percentages.