Depreciation Calculator — straight-line & declining balance

How it works

Depreciation matches the cost of a long-lived asset to the years it is used. The IRS (Publication 946) describes two common methods:

• Straight line — the same expense every year: (cost − salvage value) ÷ useful life. Simple and even; book value falls in a straight line to the salvage value.
• Double declining balance — an accelerated method that front-loads the expense. Each year it applies twice the straight-line rate (2 ÷ useful life) to the current book value, so early years take the largest write-offs. It never depreciates below the salvage value.

The book value is the cost minus all depreciation taken so far. Accelerated methods reach lower book values sooner, which can defer taxes; straight line is simpler and spreads the expense evenly. The calculator shows the chosen year's expense, the book value at that year's end, and the running total.

Worked example

A $30,000 asset with a $3,000 salvage value over a 5-year life. Straight line writes off (30,000 − 3,000) ÷ 5 = $5,400 every year, so after year 1 the book value is $24,600. Double declining uses a 40% rate (2 ÷ 5): year 1 takes 30,000 × 40% = $12,000, leaving $18,000; year 2 takes $7,200; and so on, tapering as the book value shrinks toward salvage.

Frequently asked questions

How do you calculate straight-line depreciation?

Subtract the salvage value from the cost and divide by the useful life: (cost − salvage) ÷ life. For a $30,000 asset with $3,000 salvage over 5 years, that is $5,400 a year.

What is double-declining-balance depreciation?

An accelerated method that applies twice the straight-line rate (2 ÷ life) to the declining book value each year, so more is expensed early. It stops once the book value reaches the salvage value.

What is book value?

Book value is the asset's cost minus all depreciation taken to date. It falls each year by that year's depreciation and levels off at the salvage value once the asset is fully depreciated.

Which depreciation method should I use?

Straight line is simplest and spreads the cost evenly. Accelerated methods like double declining suit assets that lose value fast or where deferring tax early is helpful. Tax rules (such as MACRS) may prescribe a method — check IRS Publication 946.

What is salvage value?

The estimated amount the asset will be worth at the end of its useful life. Depreciation never reduces the book value below it, so only cost minus salvage is ever depreciated.

Does this calculator handle MACRS?

It covers the two underlying methods — straight line and declining balance — that MACRS builds on, but not the specific IRS tables, conventions and recovery periods. Use it to understand the methods, and Publication 946 for a tax filing.