Free tool · US and Canada · 2026
Depreciation calculator
A year-by-year schedule for one asset: US tax depreciation (MACRS, Section 179 and bonus), book depreciation, or Canadian capital cost allowance. Runs in your browser; nothing is saved.
The asset
What you paid, including delivery and setup; for a building, leave out the land
Mid-quarter applies if more than 40% of the year's assets went into service in the last 3 months
Taken off the cost first
On the cost left after Section 179
First year
Cost
$25,000.00
Section 179
$0.00
Bonus depreciation (0%)
$0.00
Left to depreciate under MACRS
$25,000.00
MACRS, year 1 (20%)
Pub 946 Table A-1
$5,000.00
Total deduction, year 1
$5,000.00
General Depreciation System, 100% business use, calendar tax years. Passenger cars have yearly dollar caps, and listed property used 50% or less for business must use ADS; neither is applied here. An estimate, not tax advice.
Year-by-year schedule
| Year | Section 179 + bonus | MACRS | Deduction | Accumulated | Remaining basis |
|---|---|---|---|---|---|
| 2026 (1) | $0.00 | $5,000.00 | $5,000.00 | $5,000.00 | $20,000.00 |
| 2027 (2) | $0.00 | $8,000.00 | $8,000.00 | $13,000.00 | $12,000.00 |
| 2028 (3) | $0.00 | $4,800.00 | $4,800.00 | $17,800.00 | $7,200.00 |
| 2029 (4) | $0.00 | $2,880.00 | $2,880.00 | $20,680.00 | $4,320.00 |
| 2030 (5) | $0.00 | $2,880.00 | $2,880.00 | $23,560.00 | $1,440.00 |
| 2031 (6) | $0.00 | $1,440.00 | $1,440.00 | $25,000.00 | $0.00 |
How it is calculated
US tax depreciation (MACRS)
The order follows IRS Publication 946. Any Section 179 deduction comes off the cost first. Bonus depreciation is then taken on what is left, at 100% for property acquired after January 19, 2025. Whatever remains is depreciated with the General Depreciation System table for the property class and convention:
- 3-, 5-, 7-, 10-, 15- and 20-year property: Table A-1 (half-year convention) or Tables A-2 to A-5 (mid-quarter, by the quarter the asset went into service). These use the 200% declining balance method for 3- to 10-year property and 150% for 15- and 20-year property, switching to straight line when that gives more.
- Residential rental buildings: 27.5-year straight line, mid-month convention (Table A-6).
- Nonresidential buildings: 39-year straight line, mid-month convention (Table A-7a). Section 179 and bonus are not applied to buildings here.
Each year's MACRS deduction is the basis left after Section 179 and bonus times that year's table percentage, rounded to the cent; the last year takes whatever is left so the schedule adds up to the cost exactly. A 5-year asset on the half-year convention deducts 20%, 32%, 19.2%, 11.52%, 11.52% and 5.76% over six tax years.
Book depreciation
Straight line spreads the cost minus salvage value evenly over the useful life. Declining balance applies 200% (or 150%) of the straight-line rate to the book value each year, switches to straight line once that gives more, and stops at the salvage value. If the asset was in use for only part of the first year, that year is prorated by month and the schedule runs into one extra year.
Canadian capital cost allowance (CCA)
The cost goes into its class, and each year's maximum claim is the class rate times the undepreciated capital cost (UCC). In the year of purchase the half-year rule allows half the normal claim. Passenger vehicles in Class 10.1 are capped: for vehicles acquired in 2026 only the first $39,000 before sales tax counts (Department of Finance, January 14, 2026). The schedule assumes the class was empty before, with no sales.
CCA classes in the calculator
As of October 24, 2026.
| Class | Rate | Typical property |
|---|---|---|
| Class 1 | 4% | Buildings acquired after 1987 |
| Class 6 | 10% | Frame, log or stucco buildings, fences, greenhouses |
| Class 8 | 20% | Furniture, appliances, tools of $500 or more, most other equipment |
| Class 10 | 30% | Vans, trucks, tractors, other general-purpose vehicles |
| Class 10.1 | 30% | Passenger vehicles costing more than $39,000 (2026) |
| Class 12 | 100% | Software, small tools and utensils under $500, linens, uniforms |
| Class 14.1 | 5% | Goodwill and other intangibles (after 2016) |
| Class 16 | 40% | Taxis, short-term rental vehicles, heavy freight trucks |
| Class 43 | 30% | Manufacturing and processing machinery (including M&P machinery acquired after 2025) |
| Class 50 | 55% | Computer hardware and systems software |
| Class 53 | 50% | Manufacturing and processing machinery acquired 2016–2025 |
| Class 54 | 30% | Zero-emission passenger vehicles |
Sources
- IRS Publication 946, How To Depreciate Property (Appendix A, Tables A-1 to A-7a)
- IRS Rev. Proc. 2025-32 (2026 inflation adjustments, Section 179 limits: section 4.24)
- IRS Notice 2026-11: interim guidance on 100% bonus depreciation under section 168(k)
- IRS: One, Big, Beautiful Bill provisions
- CRA: Classes of depreciable property
- CRA: Accelerated investment incentive
- CRA: How to calculate the deduction for CCA (half-year rule)
- Department of Finance: 2026 automobile deduction limits (January 14, 2026)
- CRA: What's new for corporations (AII reinstated by Bill C-15, Royal Assent March 26, 2026)
Questions
What is MACRS?
The Modified Accelerated Cost Recovery System is how US businesses depreciate most property for tax. Each asset goes into a class (5-year for computers and vehicles, 7-year for furniture and most machinery, 27.5 or 39 years for buildings), and the IRS publishes a percentage of the cost to deduct in each year. This calculator uses those tables from IRS Publication 946.
Is bonus depreciation 100% again?
Yes, for qualified property acquired after January 19, 2025. The One Big Beautiful Bill Act made 100% bonus depreciation permanent for that property (IRS Notice 2026-11 has the interim guidance). Property acquired under a binding contract before January 20, 2025 stays on the old phase-down: 40% if placed in service in 2025 and 20% in 2026.
What is the Section 179 limit for 2026?
For tax years beginning in 2026, up to $2,560,000, reduced dollar for dollar once more than $4,090,000 of Section 179 property is placed in service in the year (IRS Rev. Proc. 2025-32). The deduction also cannot be more than your business income for the year.
Half-year or mid-quarter convention?
Most assets use the half-year convention: whatever month you buy, you get half a year of depreciation in the first year. If more than 40% of the depreciable cost of everything you placed in service during the year (not counting buildings) went into service in the last three months of the tax year, you must use the mid-quarter convention for that year's assets instead.
How does Canadian CCA differ from depreciation?
Capital cost allowance is the tax version of depreciation in Canada. Assets are pooled in classes with a set rate (Class 8 at 20%, Class 10 at 30%, Class 50 at 55%), the claim is a percentage of the undepreciated capital cost each year, and in the year of purchase only half the normal claim is allowed (the half-year rule). CCA is a maximum: you can claim less, or nothing, in any year.
Is the Accelerated Investment Incentive still available?
Yes. Bill C-15, which received Royal Assent on March 26, 2026, brought back the full incentive for property acquired after 2024: no half-year rule and 1.5 times the normal first-year claim for property available for use before 2030, with a reduced version after that. Property acquired before 2025 stays under the old rules, where property available for use from 2024 to 2027 only has the half-year rule suspended. Some classes, such as manufacturing machinery and zero-emission vehicles, have their own rules. Check the CRA's page on the incentive, or ask your accountant, before relying on it.
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Related
- Fixed assets and depreciation basics
- Accounting software for Canadian businesses
- US sales tax calculator and GST/HST calculator
General information, not tax advice. Depreciation rules have many exceptions (listed property, passenger car limits, ADS, short tax years, dispositions, recapture); confirm with the IRS, the CRA or your accountant before you file.
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