chart_decreasing Depreciation Calculator
Calculate asset depreciation using multiple methods. Determine the declining value of your business assets for accounting and tax purposes.
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Frequently Asked Questions - Depreciation Calculator
What is straight-line depreciation?
Straight-line depreciation spreads the cost of an asset evenly over its useful life. The formula is (Cost - Salvage Value) / Useful Life. It is the simplest and most commonly used method for financial reporting.
When should I use accelerated depreciation methods?
Accelerated methods like double-declining balance front-load depreciation, meaning larger deductions in early years. They are beneficial for assets that lose value quickly (technology equipment) or when you want to reduce taxable income sooner.
What is the difference between book depreciation and tax depreciation?
Book depreciation follows GAAP rules for financial statements and may use any systematic method. Tax depreciation follows IRS rules (MACRS in the US), which prescribe specific recovery periods and methods. The two can differ significantly.
What types of assets can be depreciated?
Tangible assets with a determinable useful life of more than one year and used in business can be depreciated: buildings, machinery, vehicles, furniture, and computers. Land cannot be depreciated as it does not wear out. Intangible assets use amortization instead.
What is bonus depreciation and Section 179?
Section 179 allows businesses to deduct the full purchase price of qualifying equipment in the year it is placed in service (up to annual limits). Bonus depreciation offers additional first-year deductions. Both accelerate tax benefits for capital investments.
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