Budgeting & Income
Asset Depreciation Calculator
Buy equipment and you cannot deduct it all at once — you spread the cost across the years it earns its keep. Which method you choose changes when the deduction lands, not how much of it you eventually get.
Tested against worked examplesHow we verify
What it is worth at the end of its useful life.
Annual depreciation: $9,000
Annual depreciation
$9,000
The same deduction every year of the asset's life.
- Total depreciable amount
- $45,000
- Straight-line equivalent
- $9,000
- Book value at the end
- $5,000
For comparison against the method you picked.
Depreciation schedule
| Year | Depreciation | Book value |
|---|---|---|
| 1 | $9,000 | $41,000 |
| 2 | $9,000 | $32,000 |
| 3 | $9,000 | $23,000 |
| 4 | $9,000 | $14,000 |
| 5 | $9,000 | $5,000 |
Compare scenariosTry three values of one input
| Asset cost | |||
|---|---|---|---|
| Annual depreciation | $8,000 | $9,000+$1,000 | $10,000+$2,000 |
| Total depreciable amount | $40,000 | $45,000+$5,000 | $50,000+$10,000 |
| Straight-line equivalent | $8,000 | $9,000+$1,000 | $10,000+$2,000 |
Every other input stays at the value you set above — currently $50,000 for asset cost. Differences are measured against the first column.
Saved scenariosSave this calculation
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How this calculator works
Depreciable base = cost − salvage value. Straight line divides that evenly across the useful life. Double declining takes 2 ÷ life of the remaining book value each year, capped so the book value never falls below salvage.
These are book depreciation methods for planning and financial statements, not a tax filing. US tax depreciation follows MACRS, and Section 179 or bonus depreciation may allow a much larger first-year deduction.
What this assumes
- The depreciation method and useful life you enter. Tax depreciation follows IRS schedules that may differ from the economic reality.
- Salvage value is a forecast, not a fact.
- Section 179 and bonus depreciation are not applied and can change the first year entirely.
What changes this number
- Method chosen
- Straight-line spreads evenly; declining balance front-loads the deduction. Same asset, very different early years.
- Useful life
- Set by schedule for tax purposes rather than by how long you actually keep the asset.
- Salvage value
- Reduces the depreciable base directly, and is the input most often guessed.
A worked example
Take the $50k equipment, 5 years scenario. These figures are produced by the calculator above, not written alongside it, so they always match what the tool returns.
What you enter
- Asset cost
- $50,000
- Salvage value
- $5,000
- Useful life
- 5 years
- Method
- Straight line — even every year
What it returns
- Annual depreciation
- $9,000
- Total depreciable amount
- $45,000
- Straight-line equivalent
- $9,000
- Book value at the end
- $5,000
Try an example
Frequently asked questions
Straight line or declining balance?
Straight line spreads the cost evenly and is simpler to explain; declining balance takes more deduction early, which suits assets that genuinely lose value fast — vehicles, computers — and helps cash flow when a business is young. Total deductions over the asset's life are the same either way.
How does double declining balance work?
Each year you take twice the straight-line rate applied to the remaining book value, not the original cost. On a five-year asset that is 40% of book value annually, so the deduction shrinks each year and never takes the value below salvage.
Is this the same as MACRS for my tax return?
No. US tax depreciation uses MACRS, with prescribed recovery periods and conventions that differ from these book methods. Section 179 and bonus depreciation can also let you deduct much of an asset immediately. Use this for planning and book purposes, and your accountant's schedule for filing.
What is salvage value?
What you expect the asset to be worth when you are finished with it. It is subtracted from cost because you only depreciate the value the business actually consumes. MACRS ignores salvage entirely, which is one of the main differences from book depreciation.
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Disclaimer: DayCents provides this calculator for educational purposes only. Results are estimates based on your inputs and the stated assumptions — they are not financial advice, a quote, or an offer of credit. Consult a qualified financial professional before making major money decisions.