Depreciation Calculator

Depreciation is the allocation of an asset's cost over its useful life. It matters for tax purposes (businesses can deduct depreciation), financial reporting (accurate asset valuation), and understanding how much value your assets lose over time.

Straight-line is simplest and most common for book depreciation. Declining balance methods (including double-declining) are useful for assets that lose value faster in early years. Sum-of-years-digits offers a middle ground. For tax purposes, consult a tax professional about MACRS rules.

Book depreciation (calculated here) uses methods like straight-line for financial reporting. Tax depreciation uses IRS rules like MACRS which may allow faster write-offs. Businesses often maintain two depreciation schedules — one for books and one for taxes.

Yes, vehicles used for business can be depreciated. The standard useful life is 5 years. For partial business use, you can only depreciate the business-use percentage. Luxury auto limits may apply for tax purposes — consult a tax professional.

The salvage value is the estimated resale value at the end of the asset's useful life. Unlike straight-line and sum-of-years-digits methods which fully account for salvage value, declining balance methods may not fully depreciate to salvage value — our calculator handles this by taking the maximum of the calculated depreciation and the remaining book value minus salvage.