Depreciation Calculator

Depreciation allocates an asset's cost over its useful life. Straight-line spreads cost evenly each year. Declining balance methods front-load depreciation, providing larger deductions in early years. The method chosen affects tax benefits and financial statements.

1. 1

   Step 1

   Enter the original asset cost (purchase price)

2. 2

   Step 2

   Input the estimated salvage value at end of useful life

3. 3

   Step 3

   Specify the useful life in years

4. 4

   Step 4

   Select depreciation method (straight-line, declining balance)

5. 5

   Step 5

   Calculator shows annual depreciation, accumulated depreciation, and book value schedule

• 1

  MACRS is required for US tax depreciation - IRS publishes specific recovery periods

• 2

  Accelerated methods like double-declining provide larger early deductions

• 3

  Book depreciation can differ from tax depreciation - track both

• 4

  Section 179 allows immediate expensing of qualifying assets up to limits

• 5

  Bonus depreciation may allow 100% first-year deduction for certain assets

• Using Wrong Useful Life

• Forgetting Salvage Value

• Mixing Book and Tax Methods

• Not Considering Bonus Depreciation