Three layers, in a fixed order
Section 179 applies first, then bonus depreciation on what's left, then the regular MACRS percentages apply to whatever basis remains after both — stacking all three inside a single tax year is exactly how a business can expense the bulk of an asset's cost immediately. Deciding whether to buy the asset at all? See the Business Valuation Calculator.
Frequently asked questions
Which recovery period applies to my asset?
Common examples: computers and vehicles are 5-year property; office furniture and most equipment are 7-year property; certain farm and manufacturing equipment can be 3 or 10-year. IRS Publication 946 has the full asset-class list — real estate uses a completely different system (27.5 or 39-year straight-line) not modeled here.
Why is bonus depreciation editable rather than fixed?
It has been on a legislated phase-down since 2023 (80%, 60%, 40%, 20%, then 0%) under the Tax Cuts and Jobs Act's original schedule, and has been a live target for further legislation since — always confirm the current-year percentage before relying on this.
Does this handle the mid-quarter convention?
No — it assumes the half-year convention, which applies unless more than 40% of your qualifying property for the year was placed in service in the fourth quarter. If that applies to you, the year-one percentage differs from what is shown here.
Last updated: June 2026