Computer & IT Equipment Depreciation Calculator

For US tax, computers and peripherals are 5-year MACRS property (spanning six tax years with the half-year convention). For book/financial reporting, many businesses use a shorter 3-year straight-line life to reflect how quickly technology becomes obsolete. The two can legitimately differ.

Usually yes — computers and off-the-shelf software qualify for Section 179 expensing and bonus depreciation, letting you deduct most or all of the cost in year one (subject to Section 179's annual limit and income cap). For fast-obsolescing IT, immediate expensing often matches the economics better than a six-year MACRS schedule. This calculator models both so you can compare.

Off-the-shelf (canned) software is generally treated like equipment — eligible for Section 179 and depreciable over 3 years if not expensed. Custom-developed or acquired-with-a-business software can have different treatment (amortised over a longer period, e.g. 15 years for some acquired intangibles). For routine purchased software, the equipment-style treatment this calculator uses is the common case; confirm specifics for bespoke software.

No — software-as-a-service and cloud subscriptions are typically operating expenses (deducted in full as incurred), not capital assets, because you're paying for access rather than owning an asset. Depreciation applies to purchased hardware and owned software licences. So a server you buy is depreciated; a cloud instance you rent is expensed. Classify the spend correctly before reaching for this calculator.