Calculate MACRS depreciation, Section 179 expensing, and bonus depreciation for business assets placed in service in 2025. Generates a full depreciation schedule with remaining basis tracking.
Most business property is recovered under the Modified Accelerated Cost Recovery System (MACRS), which assigns each asset a recovery period (for example, 5 years for computers and vehicles, 7 years for office furniture, 27.5 years for residential rental, 39 years for nonresidential real property), a depreciation method (200% or 150% declining balance for personal property, straight-line for real property), and a convention (half-year, mid-quarter, or mid-month) that governs how much depreciation the first and last years receive.
Two elective provisions let businesses front-load these deductions. Section 179 expensing lets you immediately deduct the cost of qualifying property up to $2,500,000 for 2025, with the limit phasing out dollar-for-dollar once total qualifying purchases exceed $4,000,000 (both raised by the One Big Beautiful Bill Act). Bonus depreciation, which OBBBA permanently restored to 100% for property acquired and placed in service after January 19, 2025, then expenses the remaining basis (property placed in service on or before January 19, 2025 uses the prior 40% rate).
A business buys $90,000 of qualifying equipment and places it in service in mid-2025. It could elect $90,000 of Section 179 (well under the $2.5M cap) and deduct the full cost in year one. Alternatively, with 100% bonus depreciation now available, simply applying bonus to the $90,000 produces the same full first-year write-off — without Section 179’s taxable-income limitation. If the business instead wanted to spread the deduction, 5-year MACRS with the half-year convention would give roughly 20% ($18,000) in year one.
Section 179 cannot create or increase a business loss — it is limited to taxable business income, with the excess carried forward; bonus depreciation has no such limit and can produce a loss. The mid-quarter convention is mandatory (not optional) if more than 40% of the year’s personal-property additions are placed in service in the fourth quarter. Listed property such as vehicles must be used more than 50% for business to claim accelerated methods, and passenger autos remain subject to the section 280F luxury-auto dollar caps even when bonus applies. Critically, many states do not conform to federal bonus depreciation or the higher Section 179 limits, so a separate state depreciation schedule is often required.
The One Big Beautiful Bill Act raised the 2025 Section 179 expensing limit to $2,500,000, with the deduction phasing out once total qualifying property placed in service exceeds $4,000,000. Section 179 is also limited to your taxable business income.
Yes. OBBBA permanently restored 100% first-year bonus depreciation for qualifying property acquired and placed in service after January 19, 2025. Property placed in service on or before that date remains at the 40% phase-down rate that applied earlier in 2025.
They often reach the same result, but bonus depreciation is generally simpler and is not capped by business income, while Section 179 lets you pick specific assets and amounts. Many preparers apply Section 179 selectively and let 100% bonus handle the rest, coordinating with state rules and entity-level limits.