Depreciation Calculator

Are you wondering to know how to calculate depreciation expense? You are at the right place! The expert staff of calculator-online provided a significant tool depreciation calculator; this tool uses the MACRS Depreciation Calculation Methods (i:e 200% Declining Balance Method, 150% Declining Balance Method, GDS Straight Line Depreciation Method), and also the Double Declining Balance Method.Well, this tool works as a macrs depreciation calculator to calculate depreciation.

Before knowing about this depreciation calculator, let’s start with the term ‘Macrs Depreciation.’

What Is MACRS Depreciation?

MACRS is an acronym for the Modified Accelerated Cost Recovery System; it is the tax depreciation system used in the United States. Well, this depreciation schedule will begin with a declining balanced (DB) method, and then it will switch to a straight line (SL) schedule to finish the depreciation schedule. Under MACRS, the amount of the tangible property is depreciated over a useful life of the asset.

The Modified Accelerated Cost Recovery System was introduced in 1986, according to MACRs method; generally the property placed into service after the date will be depreciated. It is a modification of the ACRS (Accelerated Cost Recovery System) that was in use from 1981-1986.

In simple words, MACRS accelerated the cost recovery (depreciation) of an asset but outcomes in the same net depreciation as an individual would receive under straight-line depreciation. Remember that the taxpayer gets feasibility from MACRS depreciation as he/she gets a lower net present value for their tax burden.

Additionally, the method groups several types of assets into different classes that are shown in the given table. Our macrs depreciation calculator also utilizes the same classes while calculating depreciation.

Depreciation Calculator:

The macrs depreciation calculator is specifically designed to calculate how fast the value of an asset decreases over time. Well, you can use this tool to compare four different models of depreciation that are the 200% declining balance, 150% declining balance, straight-line method (over a GDS Recovery Period), and the double-declining-balance method. The smart calculator creates macrs depreciation schedule according to the given inputs. Also, this tool helps you to understand how to calculate accumulated depreciation; you just have to enter the values for a given field to get your results.

How to Calculate Depreciation With This Tool:

Well, you ought to follow the given steps to calculate the depreciation schedule for depreciable property.

• First, you have to enter the basis (asset cost) in the given field
• Then, you have to enter the property use percentage(%) in the given field
• Right after, you have to select an applicable recovery period of your property from the drop-down button
• Very next, you have to choose the depreciation method
• Then, you have to select the applicable convention from the drop-down list
• Finally, you have to enter the date of the property was placed in service
• Once done, then you have to hit the calculate, and our calculator shows the complete depreciation schedule according to your selective depreciation method

Note: If you want to calculate double declining depreciation, then you have to follow the steps mentioned above, but there is no need to select applicable convention, and enter the salvage value instead of property use percentage and hit the calculate button of double declining balance calculator to get depreciation table according to DDD.

Well, before knowing about the different methods for macrs depreciation, let we start with both terms of SLD and DDD.

Straight Line Depreciation Method (SLD):

SLD is a very common and the simplest method that helps to calculate depreciation expense. In simple words, with straight-line depreciation, the expense amount is the same every year over the useful life of an asset. The SLD incorporates a salvage value (an estimated value that an owner would receive when selling an asset at the end of its useful life. If your preferred method for depreciation is a straight line, then you can use the above straight line depreciation calculator to calculate your depreciation expense. Sometimes, the SLD method also referred to as a fixed installment method.

Straight Line Depreciation Formula:

Annual Depreciation Expense = (Cost of an asset – Salvage Value)/Useful life of an asset

Double-Declining Depreciation Method (DDD):

Well, this depreciation method is one that involves a double depreciation rate. The DDD reflects the fact that assets are often more productive in their early years than in their later years.

Additionally, the practical fact reveals that any asset (think of buying a new car) loses more its value in the very first few years of its use. Yes, with the DDD balance method, the depreciation factor is 2x that of the SLD or Straight Line Depreciation method. However, our double declining depreciation calculator also considers the same factor while creating a depreciation schedule. Remember that, the depreciation rates in DDD could either be 150% or 200% or even 250% of the SLD method.

Double Declining Depreciation Formula:

Annual Depreciation Expense = 2 x (Cost of an asset – Salvage Value)/Useful life of an asset

Or

The double declining balance depreciation expense formula is:

Depreciation Expense = 2 x Cost of the asset x depreciation rate

MACRS Depreciation Calculation Methods:

Well, there are four MACRS depreciation methods that are based on the IRS (Internal Revenue Service). Read on to know about these methods.

200% Declining Balance Method (GDS):

It is the method in which the depreciation rate is double the straight-line depreciation rate and also provides the highest tax deduction during the first few years, and then changes to the SLD method when that method provides an equal or greater deduction. You just have to plug your values in the macrs calculator and allow it to do the math for you.

150% Declining Balance Method (GDS):

It is another method that provides a greater depreciation rate of 150% more than the straight-line method and then changes to the SLD amount when that method provides an equal or greater deduction.

Straight Line Method (SLM) Over a GDS Recovery Period:

The SLM (GDS) method is one of the best methods of depreciation that allows for a deduction of the same amount of depreciation every year but except the first and last year of service.

Our accurate macrs depreciation calculator also follows these methods while calculating depreciation for given values.

What Is Sum-of-Years-Digits Depreciation?

Remember that that sum-of-years-digits depreciation method has a more accelerated write-off than SLD method.

For Example:

An asset will be depreciated in 8 years.

Sum of years digits: 1 + 2 + 3 + 4 + 5 + 6 + 7 + 8 = 36,

Depreciation rate:

• Year 1: 8/36

• Year 2: 7/36

• Year 3: 6/36

• Year 4: 5/36

• Year 5: 4/36

• Year 6: 3/36

• Year 7: 2/36

• Year 8: 1/36

Final Words:

Well, you can calculate depreciation according to any method you wish using the above free and accurate depreciation calculator. There is no need to remember depreciation formulas, you just have to enter the values in the designated field, and the remaining maths will do by our calculator.