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Equipment Depreciation Calculator (2026)

Bought equipment, a vehicle or computers for your business? Compare a full first-year write-off with depreciation over several years, see the deduction for each year, and estimate the tax you save under the 2026 rules.

Section 179 and bonus depreciation need more than 50% business use.
Computers and vehicles are usually 5-year property; office furniture and most equipment 7-year.
Combined federal and state rate on business income, to estimate the tax saved.

Your depreciation

$50,000First-year deduction · about $12,000 less tax

YearDeductionLeft to depreciate
Year 1$50,000$0

2026 rules: 100% bonus depreciation for property acquired after January 19, 2025; Section 179 up to $2,560,000, reduced when purchases exceed $4,090,000 and limited to business income. MACRS uses the half-year convention (IRS Publication 946). Many states, including California, don’t follow these federal rules.

How this calculator works

Bonus depreciation: the 2025 tax law made 100% bonus depreciation permanent for qualifying property acquired after January 19, 2025. You can deduct the whole business-use cost in the year the asset is placed in service. It has no dollar limit.

Section 179 also lets you expense the cost in year one, up to $2,560,000 for 2026. The limit shrinks dollar for dollar once your total equipment purchases for the year pass $4,090,000, and the deduction can’t exceed your business income. Heavy SUVs are capped at $32,000.

MACRS is the standard way to depreciate over several years. Most equipment is 5-year or 7-year property. The calculator uses the IRS half-year convention table, which treats assets as bought mid-year, so a 5-year asset is deducted over six tax years.

Straight line spreads the cost evenly over the recovery period, again with half a year at each end.

Only the business-use share of the cost can be depreciated. Bonus depreciation and Section 179 need more than 50% business use. The tax saved is the deduction × the tax rate you enter.

Worked example

$50,000 of 5-year equipment, 100% business use, 24% tax rate

  1. Bonus depreciation: the full $50,000 in year one, saving about $12,000 of tax that year.
  2. MACRS 5-year: $10,000, $16,000, $9,600, $5,760, $5,760 and $2,880 over six years: the same $50,000 total.
  3. Straight line: $5,000 in year one, $10,000 a year for four years, then $5,000.

Questions people ask

Is bonus depreciation 100% in 2026?

Yes, for qualifying property acquired after January 19, 2025. The 2025 law made 100% bonus depreciation permanent, replacing the previous phase-down that would have cut it to 20% in 2026.

What is the Section 179 limit for 2026?

$2,560,000, reduced once total qualifying purchases in the year exceed $4,090,000 and eliminated at $6,650,000. The deduction is also limited to your business income.

Should I take the whole deduction in year one?

Not always. Writing off everything now helps most when your income is high this year. If you expect a higher tax rate later, spreading deductions with MACRS can be worth more. Ask a tax professional.

Do states follow these rules?

Not all. California, for example, doesn’t allow federal bonus depreciation and has a much lower Section 179-style limit, so state depreciation can differ from federal.

Sources

Last reviewed October 2, 2026