Equipment Depreciation Calculator

Calculate business equipment depreciation for 2025 using Section 179 deduction, bonus depreciation, and MACRS methods. Optimize your tax strategy with professional depreciation analysis and IRS-compliant calculations.

Section 179 Bonus Depreciation MACRS Schedules 2025 Compliance
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Professional Depreciation Analysis

Calculate Equipment Depreciation

Enter your business equipment details for comprehensive depreciation analysis

Equipment Information

Select the category that best describes your equipment
$
Total cost including installation and setup
Month and year of purchase/placed in service
Percentage used for business purposes
MACRS recovery period (auto-filled based on equipment type)
Depreciation convention method

Depreciation Method Selection

Deduct up to $1,220,000 in 2025 (subject to income limits)
Additional first-year depreciation (varies by year)
$
Custom Section 179 limit (defaults to 2025 limit)
Bonus depreciation percentage (auto-filled for 2025)

Business Information

$
Required for Section 179 income limitation calculations
$
Total Section 179 property placed in service this year
Business structure affects depreciation rules
Special rules for building improvements after 2017

Special Considerations

Property with personal and business use (cars, computers, etc.)
Vehicles subject to luxury auto limitations
Property purchased used (affects bonus depreciation eligibility)
Required for certain property types or elections
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Section 179 Deduction

Immediate expensing of business equipment up to annual limits with income-based phase-outs.

  • 2025 limit: $1,220,000
  • Phase-out threshold: $3,050,000
  • Limited to business taxable income
  • Eligible for most business equipment
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Bonus Depreciation

Additional first-year depreciation allowance for qualified business property.

  • 2025 rate: 80% (phasing down)
  • New and used property eligible
  • No income limitations
  • Applied after Section 179
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MACRS Depreciation

Modified Accelerated Cost Recovery System for regular depreciation over asset life.

  • Recovery periods: 3, 5, 7, 10, 15, 20+ years
  • Half-year convention typically applies
  • Double declining balance method
  • Straight-line alternative available

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Equipment Depreciation FAQ

Section 179 allows immediate expensing up to $1,220,000 (2025) but is limited by business income and has equipment purchase thresholds. Bonus depreciation provides additional first-year depreciation (80% in 2025) with no income limitations but applies after Section 179. Both can be used together for maximum tax benefits.

Recovery periods are determined by IRS asset classes: computers and software (5 years), office furniture (7 years), machinery (5-7 years), vehicles (5 years), and building improvements (15-39 years). The calculator automatically suggests periods based on equipment type, but you can override if needed for specific situations.

Yes, under current tax law (through 2026), bonus depreciation applies to both new and used qualified property, as long as it's new to your business. The property must not have been used by you or a related party previously. This significantly expanded the tax benefits available for used equipment purchases.