MACRS Depreciation Calculator
With this handy calculator, you can calculate the depreciation schedule for depreciable property using Modified Accelerated Cost Recovery System (MACRS).
The MARCS depreciation calculator creates a depreciation schedule showing the depreciation percentage rate, the depreciation expense for the year, the accumulated depreciation, the book value at the end of the year, and the depreciation method used in calculating.
Follow the next steps to create a depreciation schedule:
- First, enter the basis of an asset, and then enter the business-use percentage
- Next, select an applicable recovery period of property from the dropdown list
- Next, choose your preferred depreciation method and the applicable convention
- Finally, input the date the property was placed in service, and then click the "Calculate" button.
What is MACRS Depreciation?
The Modified Accelerated Cost Recovery System, or MACRS is the primary method of depreciation for federal income tax purposes allowed in the U.S. to determine depreciation deductions. The MACRS system of depreciation allows for larger depreciation deductions in the early years and lower deductions in the later years of ownership. Under MACRS, the deduction for depreciation is calculated by one of the following methods:
MACRS consists of two systems: the general depreciation system (GDS) and the alternative depreciation system (ADS).
Assets are grouped into property classes based on recovery periods of 3-year property, 5-year property, 7-year property, 10-year property, 15-year property, 20-year property, 25-year property, 27.5-year residential rental property, and 39-year nonresidential real property.
MACRS Depreciation Formula
The MACRS Depreciation Calculator uses the following basic formula:
D i = C × R i
- D i is the depreciation in year i,
- C is the original purchase price, or basis of an asset
- R i is the depreciation rate for year i, depends on the asset's cost recovery period
You can also calculate the depreciation by using the table factors listed in Publication 946 from the IRS.