Depreciation Methods Comparison

Compare straight-line, MACRS, and double-declining depreciation side by side.
$
yrs

Straight-Line Annual

$20,000.00

Year-by-Year Comparison

Year 1SL: $20,000.00 | DDB: $40,000.00 | MACRS: $20,000.00
Year 2SL: $20,000.00 | DDB: $24,000.00 | MACRS: $32,000.00
Year 3SL: $20,000.00 | DDB: $14,400.00 | MACRS: $19,200.00
Year 4SL: $20,000.00 | DDB: $8,640.00 | MACRS: $11,520.00
Year 5SL: $20,000.00 | DDB: $5,184.00 | MACRS: $11,520.00

Use the Depreciation Methods Comparison above to calculate your results. Enter your values and see instant results — all calculations run in your browser.

Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.

How It Works

This calculator helps businesses compare different depreciation methods to understand how asset value decreases over time. Choosing the right method impacts financial statements, tax liabilities, and overall business profitability by allocating asset costs appropriately.

Depreciation is the systematic allocation of the cost of a tangible asset over its useful life. It does not reflect the asset's market value but rather its expense recognition for accounting and tax purposes.

Ensure you accurately estimate the useful life and salvage value of an asset, as these significantly impact depreciation calculations. A common mistake is using a method solely for tax benefits without considering its impact on reported earnings.

Example: Straight-Line vs. Double-Declining Balance for a $100,000 Machine

  1. 1 Input: Asset Cost = $100,000, Salvage Value = $10,000, Useful Life = 5 years.
  2. 2 Straight-Line: (Cost - Salvage Value) / Useful Life = ($100,000 - $10,000) / 5 = $18,000 annual depreciation. Double-Declining Balance (Year 1): (2 / Useful Life) * Book Value = (2/5) * $100,000 = $40,000 depreciation.
  3. 3 Result: Straight-Line depreciation is $18,000 per year. Double-Declining Balance depreciation is $40,000 in the first year (and would be recalculated on the remaining book value for subsequent years).
  4. 4 Takeaway: Straight-line provides a consistent expense, while double-declining balance provides higher depreciation in early years, which can lead to larger tax deductions initially but lower reported income.

Source: IRS — Publication 946, How To Depreciate Property · Last updated: April 2026

Frequently Asked Questions

Which depreciation method gives the biggest tax deduction early on?
MACRS and double-declining balance front-load deductions, giving you larger write-offs in early years. This is valuable because a dollar of tax savings today is worth more than a dollar saved in the future due to the time value of money.
When should I use straight-line depreciation?
Straight-line is best when an asset provides roughly equal benefit each year, such as office furniture or buildings. It is simpler to calculate and results in consistent expense recognition each period.
What is the MACRS recovery period for common assets?
Common MACRS periods include 5 years for vehicles and computers, 7 years for office furniture and equipment, 15 years for land improvements, and 27.5 or 39 years for residential and commercial buildings respectively.

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