Depreciation Calculator 2025 | Straight-Line & Declining

Asset Depreciation Calculator

Asset Cost (purchase price)

Salvage / Residual Value (at end of life)

Useful Life (years) Common: vehicles 5 yrs · office equipment 5 yrs · commercial property 39 yrs (US MACRS) · residential rental 27.5 yrs

Depreciation Method

Straight-Line (SL) Declining Balance 150% Double Declining Balance (200%)

Year 1 Depreciation

Total Depreciable Amount

Useful Life

— yrs

Salvage Value

Depreciation Schedule

Year	Depreciation	Accum. Depreciation	Book Value

Depreciation Methods Compared

Method	How It Works	Best For
Straight-Line (SL)	Equal deduction each year: (Cost − Salvage) ÷ Life	Simple assets, accounting, rental property
Declining Balance 150%	1.5 × SL rate applied to remaining book value	Moderate front-loading of deductions
Double Declining Balance (DDB)	2 × SL rate applied to remaining book value; switches to SL when SL gives higher deduction	Vehicles, equipment — maximum early deductions

For US federal tax purposes, most business assets use MACRS (Modified Accelerated Cost Recovery System), which follows declining balance rules with a switch to straight-line. Consult a tax professional or IRS Publication 946 for exact MACRS class lives and methods.

Frequently Asked Questions

Straight-line depreciation = (Asset Cost − Salvage Value) ÷ Useful Life. For example, a $50,000 vehicle with a $5,000 salvage value and a 5-year life depreciates at ($50,000 − $5,000) ÷ 5 = $9,000 per year. The book value decreases by the same fixed amount each year until it reaches the salvage value.

Double declining balance (DDB) applies twice the straight-line rate to the asset's current book value each year. The rate is fixed (e.g. 40% for a 5-year asset = 2 ÷ 5), but the base decreases annually. DDB results in larger deductions in early years and smaller ones later. Most implementations switch to straight-line in the year that straight-line would give a higher deduction, ensuring the asset is fully depreciated to salvage value.

MACRS (Modified Accelerated Cost Recovery System) is the US tax depreciation system for most business assets. It assigns assets to class lives (3, 5, 7, 15, 27.5, or 39 years) and applies 200% or 150% declining balance methods with a half-year convention in year 1. MACRS is more favourable than straight-line for tax purposes because it front-loads deductions — reducing taxable income more in early years. The Section 179 deduction and bonus depreciation rules may allow you to deduct the entire asset cost in year 1 (consult IRS Publication 946).