How the depreciation calculator works
Depreciation spreads an asset's cost over the years it is used. Straight-line takes the same amount every year; declining balance takes more in early years, when equipment typically loses value fastest.
Double declining = Book value × (2 ÷ Useful life), never below salvage
Book value is cost minus depreciation taken so far. Both methods end at the salvage value. For US tax returns, most business property uses MACRS on IRS Form 4562, which has set recovery periods (5 years for computers and vehicles, 7 for furniture) and allows bonus depreciation and Section 179 expensing. Use this calculator for planning and bookkeeping, and IRS Publication 946 for tax.
Worked example
A $50,000 machine with a $5,000 salvage value and a 5-year life depreciates $9,000 a year under straight-line, leaving a book value of $32,000 after two years. Double declining balance takes 40% a year: $20,000 in year 1 and $12,000 in year 2, leaving $18,000 after two years.
Frequently asked questions
What is straight-line depreciation?
Equal depreciation each year: cost minus salvage, divided by useful life.
Why use double declining balance?
It front-loads depreciation, matching assets that lose value quickly and reducing early taxable profit.
What is salvage value?
The expected value of the asset at the end of its useful life.
Is this the same as MACRS?
No. MACRS is the IRS system with fixed recovery periods and conventions; it is based on declining balance switching to straight-line.
Updated October 2026. Results are estimates for education, not financial or medical advice. All math runs in your browser; nothing you type is sent anywhere.