Finance category

Mortgage, loan, investing, tax, and money calculators.

Bonus Depreciation Calculator

Bonus depreciation lets you deduct a big percentage of qualifying business property cost in year one. This calculator shows the deduction, year-one total, and tax savings.

Asset cost

Bonus depreciation %

2024: 60%, 2025: 40%, phaseout

Useful life (years)

Marginal tax rate

Year-one tax savings

$18,496

at 32% bracket

Bonus deduction (year 1)

$51,000

60% of cost

Year 1 total deduction

$57,800

bonus + first year regular

Annual depreciation (after year 1)

$6,800

remaining basis / life

How bonus depreciation works

Bonus depreciation lets you deduct a percentage of qualifying property cost in the first year, on top of regular depreciation. Originally 100%; phasing down 20 points per year — 60% in 2024, 40% in 2025, 20% in 2026, 0% in 2027 unless extended.

Most assets with useful life under 20 years qualify (equipment, vehicles, computers, furniture). For real estate investors, cost segregation studies break out personal property (5/7/15-year) from the building (27.5/39-year) to apply bonus to the personal property portion.

Editorial noteMaintained by EveryCalc - Reviewed June 2026

EveryCalc calculators are designed for fast, practical estimates with transparent inputs and no required account. We use plain formulas, visible assumptions, and related tools so visitors can check the result from more than one angle.

Results are informational only. For financial, tax, legal, medical, construction, or other high-impact decisions, verify the output against primary sources or a qualified professional.

Learn more about our review process on the EveryCalc methodology page.

How this calculator works

What this page estimates

This Bonus Depreciation Calculator is built to give a quick, browser-based estimate for bonus depreciation. Bonus depreciation lets you deduct a big percentage of qualifying business property cost in year one. This calculator shows the deduction, year-one total, and tax savings. The inputs stay on the page during normal use, and the result should be treated as an estimate for planning, comparison, or education rather than professional advice.

Calculation approach

The calculator applies the standard relationship implied by the inputs, then formats the answer so it can be checked and reused. For finance tools, the most important step is using consistent units, rates, time periods, and assumptions before comparing the result with another calculator or outside quote.

Example workflow

For example, start with a realistic value you already know, change one input at a time, and watch how the answer moves. That makes it easier to tell whether the result is being driven by the main amount, the rate, the time period, or a unit conversion.

Practical checks

Use current, real-world numbers when the result affects money, health, tax, or legal decisions.
Run a low, base, and high case when the inputs are estimates.
Check the related calculators below when the next decision depends on a different assumption.

How to interpret the bonus depreciation result

Best use

Use the result as a planning number for comparing payments, rates, returns, tax reserves, or cash-flow choices before you request a quote or make a commitment.

Cross-check

Compare the answer with the contract, lender estimate, tax form, brokerage statement, payroll record, or invoice that will control the real-world outcome.

Watch for

Do not rely on a single optimistic rate, return, or fee assumption. Money pages work best when you run low, base, and high cases and keep professional advice separate from the estimate.

This page belongs to the Finance calculator library, so the answer should be read in the context of the decision you are modeling rather than as a universal rule.

Before relying on this bonus depreciation estimate

Most calculator mistakes come from the inputs, not the arithmetic. Use this short audit before you reuse the answer in a spreadsheet, quote, application, or important conversation.

Confirm source numbers

Match balances, rates, fees, taxes, income, and payment dates against the lender quote, payroll record, tax form, statement, invoice, or contract.

Separate cash flow from total cost

A lower monthly payment can still cost more over time if fees, interest, taxes, or a longer term are hidden in the structure.

Run conservative cases

Test at least one higher-cost or lower-return case before using the output for a purchase, refinance, investment, loan, or tax decision.

Rerun this page when the rate, price, term, fee, tax rule, income, expense, or expected holding period changes.

How to Use

Enter the asset cost.
Enter the bonus depreciation percentage for the year placed in service (60% for 2024, 40% for 2025).
Enter the asset's useful life (5 years for vehicles/computers, 7 for furniture, 15 for land improvements).
Enter your marginal tax rate to compute tax savings.

Frequently Asked Questions

What property qualifies for bonus depreciation?

Most tangible personal property with useful life under 20 years: equipment, vehicles (with limits for passenger autos), computers, furniture, qualified improvement property, and tenant improvements. New or used both qualify.

How does bonus depreciation interact with Section 179?

Section 179 applies first (with caps and phaseouts), then bonus depreciation applies to remaining basis. Section 179 is more flexible for picking specific assets; bonus is automatic on qualifying property unless elected out.

Can rental real estate use bonus depreciation?

Not on the building itself (27.5-year residential, 39-year commercial). But cost segregation can identify shorter-life components (5-year carpets, 15-year land improvements) that do qualify for bonus.

What's the bonus depreciation phaseout?

100% before 2023, 80% in 2023, 60% in 2024, 40% in 2025, 20% in 2026, 0% in 2027 — unless Congress extends. Time large purchases to maximize bonus while it's available.