SuperCalc

MACRS Depreciation Calculator

Calculate MACRS depreciation schedules for business assets. Includes all property classes, conventions, Section 179 deductions, and 2024 bonus depreciation rates.

Asset Information

Usually $0 for MACRS
Automobiles, trucks, computers, office machinery, cattle, furniture

Special Deductions

2024 limit: $1,220,000

Depreciation Analysis

Understanding MACRS Depreciation

The Modified Accelerated Cost Recovery System (MACRS) is the current tax depreciation system in the United States. It allows businesses to recover the cost of capital assets over a specified life through annual deductions.

Property Classes

3-Year Property

  • Tractor units for over-the-road use
  • Race horses over 2 years old
  • Qualified rent-to-own property

5-Year Property

  • Automobiles and light trucks
  • Computers and peripherals
  • Office machinery
  • Cattle and dairy cows

7-Year Property

  • Office furniture and fixtures
  • Most machinery and equipment
  • Railroad track
  • Agricultural machinery

Real Property

  • 27.5-year: Residential rental property
  • 39-year: Nonresidential real property
  • Uses straight-line depreciation

Conventions

  • Half-Year Convention: Assets are treated as placed in service at midyear (most common)
  • Mid-Quarter Convention: Required if more than 40% of assets are placed in service in Q4
  • Mid-Month Convention: Used for real property only

Special Depreciation Allowances (2024)

Section 179 Deduction

  • Maximum deduction: $1,220,000 for 2024
  • Phase-out begins at: $3,050,000 of qualified purchases
  • Can't exceed business income for the year
  • Applies to new and used property

Bonus Depreciation

  • 60% for property placed in service in 2024
  • 40% for 2025, 20% for 2026, 0% for 2027+
  • Applies to new property only (with exceptions)
  • No income limitation

Tax Benefits

  • Accelerated deductions reduce taxable income in early years
  • Time value of money benefit from deferred taxes
  • Improved cash flow for business reinvestment
  • Combination of Section 179 and bonus depreciation can allow 100% first-year deduction

Important Considerations

  • Listed property (vehicles, etc.) may have additional limitations
  • Alternative Minimum Tax (AMT) may require different depreciation
  • State depreciation rules may differ from federal MACRS
  • Recapture rules apply if property is sold or converted to personal use
  • Consider future tax rates when planning depreciation strategy