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Depreciation Calculator

Calculate annual asset depreciation using Straight-Line or Double Declining Balance methods.

The original purchase price of the asset.
The estimated residual value of the asset at the end of its useful life.
The number of years over which the asset will be depreciated.
Straight-line depreciates evenly; double declining is front-loaded.

Results

Annual Depreciation (Year 1)$1,800.00
Book Value After Year 1$8,200.00
Total Depreciable Amount$9,000.00

📖What is it?

Depreciation is the systematic allocation of an asset's cost over its useful life. Straight-Line (SL) spreads the cost evenly each year. Double Declining Balance (DDB) depreciates at twice the SL rate applied to the remaining book value — creating larger deductions in early years, which is favorable for tax purposes.

🎯How to use

1. Enter the original cost of the asset. 2. Enter the estimated salvage (residual) value at end of life. 3. Enter the useful life in years. 4. Select straight-line or double declining balance. The calculator shows Year 1 depreciation, book value after Year 1, and the total depreciable amount.

💡Example scenario

A $10,000 machine has a $1,000 salvage value and a 5-year useful life. Straight-line: $9,000 / 5 = $1,800/year. Double Declining Balance: $10,000 x (2/5) = $4,000 in Year 1. By Year 3, DDB switches to SL to ensure the book value does not fall below salvage.

🏆Pro tip

For tax purposes, the IRS MACRS system often allows accelerated depreciation that differs from book depreciation. Section 179 lets businesses deduct up to $1.16M (2024) of qualifying equipment in Year 1. Typical useful lives: computers 5 years, vehicles 5 years, furniture 7 years, commercial buildings 39 years. Consult a tax advisor to maximize allowable deductions.