Bonus Depreciation Calculator (US)

It's an additional first-year deduction under IRC §168(k): you expense a set percentage of a qualifying asset's cost immediately, then depreciate the remaining basis under MACRS. It has no dollar cap and no income limit (it can create a loss), and it applies automatically to qualifying property unless you elect out by class.

It depends on the year the asset is placed in service — the rate was 100% and has been phasing down by 20 percentage points per year under current law, though legislation can change this. Because it moves annually, enter the rate that applies to your placed-in-service year (confirm with IRS guidance or your accountant) rather than assuming a fixed figure.

They're complementary. Section 179 is flexible (choose the amount) but capped by an annual limit and your taxable income; bonus is all-or-nothing by asset class, uncapped, and can create a loss. A common strategy is Section 179 first up to the income limit, then bonus depreciation on the remaining basis to deduct the rest. The right mix depends on your income, purchase volume and state conformity — model both.

Often not. Many US states decouple from federal bonus depreciation (and sometimes Section 179), requiring add-backs and separate state depreciation schedules. So an asset can have three depreciation lives at once — book, federal tax and state tax. Check your state's conformity rules; this calculator models the federal mechanics, but state treatment may differ.