Business Vehicle Depreciation Calculator
Calculate MACRS depreciation for business vehicles with luxury vehicle limits.
Year 1 Deduction
$44,000.00
Total Deductions
$44,000.00
Depreciable Basis
$44,000.00
Year-by-Year Depreciation Schedule
| Year 1 | $44,000.00 |
2026 Luxury Vehicle Limits
| Year 1 (with bonus) | $20,200.00 |
| Year 1 (no bonus) | $12,200.00 |
| Year 2 | $19,500.00 |
| Year 3 | $11,700.00 |
| Year 4+ | $6,960.00 |
Use the Business Vehicle Depreciation Calculator 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
Our Business Vehicle Depreciation Calculator helps you determine the Modified Accelerated Cost Recovery System (MACRS) depreciation for your business vehicles, including the crucial luxury vehicle limits. This is essential for accurate tax planning and maximizing your deductions, especially with the 2026 luxury vehicle limits in mind.
This calculator uses the MACRS general depreciation system (GDS) over a 5-year recovery period, applying the 200% declining balance method and switching to straight-line when advantageous. It rigorously incorporates the IRS-mandated luxury vehicle depreciation limits for each year, ensuring your calculated deductions comply with current tax law.
A common mistake is forgetting to account for Section 179 expensing or bonus depreciation, which can significantly alter your first-year deduction. Also, be mindful of the 'listed property' rules for vehicles, which can impose additional record-keeping requirements if business use isn't over 50%.
Example: New SUV Purchased in 2026
- 1 Input the purchase price of your new business SUV: $70,000. Assume the vehicle was placed in service in July 2026.
- 2 The calculator first applies the 200% declining balance method for the 5-year recovery period. It then compares this against the 2026 luxury vehicle depreciation limits. For a vehicle placed in service in July, the half-year convention is applied for the first year.
- 3 Based on a $70,000 vehicle purchased in 2026, the calculated depreciation for Year 1 (2026) would be limited to the luxury vehicle cap, which for 2026 is projected to be around $20,000 (this is an estimate as actual 2026 limits are not yet released, but based on historical increases). Subsequent years' depreciation would also be capped.
- 4 This example highlights how the luxury vehicle limits can significantly reduce your first-year depreciation deduction compared to a direct MACRS calculation without the cap. Always consult with a tax professional for personalized advice and the most up-to-date IRS figures.
Source: IRS — Publication 946, How To Depreciate Property · Last updated: April 2026
Frequently Asked Questions
What are the 2026 vehicle depreciation limits?
Can I write off a vehicle over 6,000 lbs in one year?
What is the difference between Section 179 and bonus depreciation?
You might also need
Self-Employment Tax Calculator 2026 — SE Tax & Quarterly Payments
Calculate SE tax, quarterly estimated payments, and total tax burden for freelancers and 1099 contractors. Free, instant results based on 2026 IRS rates.
LLC vs S-Corp Tax Comparison Calculator
Compare tax liability as an LLC vs S-Corp. See how much you can save on self-employment tax with an S-Corp election.
W-2 vs 1099 Comparison Calculator
Compare take-home pay as a W-2 employee vs 1099 contractor. Find the equivalent 1099 rate to match your W-2 salary.