Depreciation Methods Comparison
Compare straight-line, MACRS, and double-declining depreciation side by side.
By Konstantin Iakovlev · Updated April 2026 · Source: IRS — Publication 946, How To Depreciate Property
Straight-Line Annual
$20,000.00
Year-by-Year Comparison
| Year 1 | SL: $20,000.00 | DDB: $40,000.00 | MACRS: $20,000.00 |
| Year 2 | SL: $20,000.00 | DDB: $24,000.00 | MACRS: $32,000.00 |
| Year 3 | SL: $20,000.00 | DDB: $14,400.00 | MACRS: $19,200.00 |
| Year 4 | SL: $20,000.00 | DDB: $8,640.00 | MACRS: $11,520.00 |
| Year 5 | SL: $20,000.00 | DDB: $5,184.00 | MACRS: $11,520.00 |
Use the Depreciation Methods Comparison above to calculate your results. Enter your values and see instant results — all calculations run in your browser.
Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.
How It Works
Different depreciation methods spread an asset's cost across its life in very different shapes, and this tool lets you set them side by side to see how the value comes down over time. The choice is not just academic: it ripples through your financial statements, your tax bill, and ultimately how profitable the business looks, because it governs how and when the asset's cost lands as an expense.
At its core, depreciation is the systematic way accounting allocates the cost of a tangible asset over the years it stays useful. It is worth being clear about what it does not do: depreciation says nothing about what the asset would fetch on the open market. It exists purely to recognize the asset as an expense for accounting and tax purposes.
Two inputs drive the result more than any others, so estimate them carefully: the asset's useful life and its salvage value. Small changes there move the numbers a lot. It is also tempting to pick whichever method delivers the biggest near-term tax break, but a method chosen for tax reasons alone can distort the earnings you report, so weigh both sides before committing.
Example: Straight-Line vs. Double-Declining Balance for a $100,000 Machine
- 1 Input: Asset Cost = $100,000, Salvage Value = $10,000, Useful Life = 5 years.
- 2 Straight-Line: (Cost - Salvage Value) / Useful Life = ($100,000 - $10,000) / 5 = $18,000 annual depreciation. Double-Declining Balance (Year 1): (2 / Useful Life) * Book Value = (2/5) * $100,000 = $40,000 depreciation.
- 3 Result: Straight-Line depreciation is $18,000 per year. Double-Declining Balance depreciation is $40,000 in the first year (and would be recalculated on the remaining book value for subsequent years).
- 4 Takeaway: Straight-line provides a consistent expense, while double-declining balance provides higher depreciation in early years, which can lead to larger tax deductions initially but lower reported income.
Source: IRS — Publication 946, How To Depreciate Property · Last updated: April 2026
Frequently Asked Questions
Which depreciation method gives the biggest tax deduction early on?
When should I use straight-line depreciation?
What is the MACRS recovery period for common assets?
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