How this number is made
Straight-line depreciation expenses the same amount each year. Tax depreciation in the United States is often MACRS, which is not a straight line and is not this page. Use this for a book estimate or a contract that specifies straight line.
- Salvage is what you expect to get at the end. Many tax methods assume zero.
- Years are the useful life you are using, not necessarily the tax life.
Formula
Annual depreciation = (cost − salvage) ÷ years.
Worked example
With the figures already in the form, depreciation per year is $2,000.00.
Questions
Is this MACRS?
No. MACRS uses IRS tables and conventions. This is an even split.
What about a partial year?
This page takes a full year. A purchase in December does not get a full year under most conventions.