Depreciation Calculator
Calculate annual depreciation for business assets using straight-line, double declining balance, or sum-of-years-digits methods. Includes a year-by-year depreciation schedule.
Depreciation Schedule
| Year | Depreciation | Accumulated | Book Value |
|---|---|---|---|
Year 1 Depreciation
Which Depreciation Method is Best for Your Business?
The straight-line method is the simplest: it spreads the cost evenly across the asset's useful life. This is ideal for assets that lose value uniformly over time, like furniture or buildings, and makes financial planning predictable. For tax purposes, many small businesses prefer accelerated methods in the early years to reduce taxable income sooner.
The double declining balance (DDB) method depreciates assets at twice the straight-line rate in early years, then slows as the book value decreases. This front-loads your deductions and is well-suited for technology or vehicles that lose value faster when new. The sum-of-years-digits (SYD) method is a middle ground — also accelerated, but not as aggressive as DDB. The IRS MACRS system used for most business assets is based on declining balance concepts with preset recovery periods by asset type.
What Assets Can You Depreciate?
Businesses can depreciate tangible property used in a trade or business or held for investment that has a determinable useful life of more than one year. Common depreciable assets include computers and equipment, vehicles used for business, machinery, office furniture, and commercial buildings (though not the land itself, which doesn't wear out).
The IRS allows two powerful accelerated deduction options: Section 179, which lets you deduct the full cost of qualifying equipment in the year of purchase (up to $1,160,000 in 2024), and bonus depreciation, which currently allows 60% first-year deduction (phasing down each year). These can dramatically reduce your tax bill in the year you acquire assets, making timing of equipment purchases an important year-end tax strategy.