Loading...
Loading...
Modified Accelerated Cost Recovery System (GDS). Used for US Federal Tax.
| Years | Asset Types |
|---|---|
| 3 | Tractors, rent-to-own property |
| 5 | Autos, computers, office equipment |
| 7 | Office furniture, fixtures |
| 15 | Land improvements, gas stations |
| 27.5 | Residential rental property |
| 39 | Commercial real property |
Fill in the form on the left and click Calculate to see your depreciation schedule.
The **Modified Accelerated Cost Recovery System (MACRS)** is the primary tax depreciation system used by the IRS in the United States. Unlike traditional accounting methods, MACRS was designed by the government to encourage business investment by allowing companies to deduct the cost of their assets much faster during the early years of ownership.
MACRS consists of two main sub-systems. Understanding the difference is the first step in accurate tax planning:
One of the most powerful aspects of MACRS is that the "useful life" of an asset is predetermined by the IRS, regardless of how long you actually keep the item:
| Recovery Period | Common Examples |
|---|---|
| 5 Years | Computers, Automobiles, Taxis, Typewriters, Copiers |
| 7 Years | Office Furniture, Equipment, Machinery, Agricultural Tools |
| 15 Years | Fences, Sidewalks, Shrubbery, Land Improvements |
| 27.5 Years | Residential Rental Property |
| 39 Years | Non-Residential Commercial Real Estate |
MACRS doesn't just care about *how much* you deduct, but *when* the deduction starts. Most equipment falls under the **Half-Year Convention**, which treats an asset as being in service for exactly six months during the first year, regardless of the actual purchase date. However, if you "bunch" your purchases in the fourth quarter (buying more than 40% of your total equipment between October and December), you must use the **Mid-Quarter Convention**.
The regulatory landscape changed significantly with the passage of the **One Big Beautiful Bill Act (OBBBA)**. Under this law:
It's important to note that MACRS is for **Tax Purposes only**. For your internal financial statements (Book Value), you may still prefer to use Straight-Line depreciation to ensure your profit looks stable to investors or banks. This often leads to a "Deferred Tax Liability" on your balance sheet—our calculator helps you track the tax-side numbers accurately.
Tax & Accounting Experts
Last reviewed: March 2026
Our editorial team includes tax professionals and financial analysts who review every calculator and guide for accuracy. All content is cross-referenced with IRS Publication 946 and current tax legislation.