Equipment Payments
Equipment depreciation calculator
Work out how much an asset depreciates each year, by the two standard book methods. Enter the cost, what it will be worth at the end, and how long it lasts, and see the straight-line annual figure, the faster first-year double-declining figure, and the book value after year one, so the paperwork matches the reality.
- Depreciable base (cost - salvage)$22,500
- Straight-line, each year$3,214
- Double-declining, first year$7,143
- Book value after year one (straight-line)$21,786
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$2,000 to $8,000 a year is a typical equipment schedule. Confirm the method and life with your accountant for the tax version.
What this assumes, and where it could be wrong
Every one of these is a place the number could be off. They are here because you should be able to check our working, not because we are hedging.
DEPRECIATION IS A PAPER FIGURE, NOT A CASH ONE.
Straight-line and double-declining are two ways to spread the same total. Straight-line takes an equal slice every year down to salvage. Double-declining front-loads it, taking a bigger deduction early when the equipment arguably loses value fastest, and less later. Over the full life they deduct roughly the same total; they differ in timing.
Salvage value is the floor for straight-line, and your estimate. It is what the asset is worth when you are done with it, and straight-line never depreciates below it. Guess it honestly: too high and you under-deduct, too low and the books say the asset is worthless when it is not.
This is book depreciation, not the tax version. For US taxes, the IRS assigns each asset a class life and a method (MACRS), and Section 179 or bonus depreciation may let you deduct much of the cost in year one instead. Those are the IRS's rules, with dollar limits that change yearly, so the page points to them rather than guessing them.
The defaults are ours and are a starting point. The cost, salvage, and life are yours, and the figures are only as right as those three inputs and the useful life you can honestly claim.