Section 179 · 60% bonus · MACRS

depreciationsection-179bonus-depreciationMACRSequipmenttax-deductionself-employed

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Depreciation Calculator

Section 179, bonus depreciation, and MACRS side-by-side. Find the best year-1 deduction for your business asset purchase with 2024 limits built in.

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SE Tax Rate15.3%(vs 7.65% W-2)

QBI Deduction20%(Section 199A)

Quarterly DeadlinesApr · Jun · Sep · Jan

Asset Details

Asset cost

Business use %

Net self-employment incomeFor S179 income limit

MACRS Property Class

2024 Limits: Section 179 up to $1,220,000 (phases out above $3,050,000). Bonus depreciation: 60% (down from 100% — declining 20%/yr).

Depreciable Basis

$50,000

100% business use

S179 Year-1 Total

$50,000

S179 + remaining MACRS

Bonus Year-1 Total

$34,000

60% bonus + remaining MACRS

MACRS Year-1 Only

$10,000

5-yr property

Year-1 Deduction Comparison

Section 179Best Yr1

$50,000

≈ $11,000 tax savings @ 22%

Bonus Depreciation

$34,000

≈ $7,480 tax savings @ 22%

MACRS Only

$10,000

≈ $2,200 tax savings @ 22%

Best first-year deduction: Section 179.

MACRS Depreciation Schedule (5-year)

Year	Rate	Deduction	Remaining Basis
Year 1	20.00%	$10,000	$40,000
Year 2	32.00%	$16,000	$24,000
Year 3	19.20%	$9,600	$14,400
Year 4	11.52%	$5,760	$8,640
Year 5	11.52%	$5,760	$2,880
Year 6	5.76%	$2,880	$0

Depreciable basis

basis = asset_cost × business_use%

$50,000 × 100%

= $50,000

Only tangible business property placed in service during the tax year qualifies.

Section 179 deduction (expensing election)

S179 = min(basis, $1,220,000 limit, net_SE_income)

min($50,000, $1,220,000, $120,000)

= $50,000

Not income-limited. S179 gives you the full deduction in year 1 — maximizes cash flow versus spreading over MACRS life.

IRC §179 — 2024 limit $1,220,000; phase-out begins at $3,050,000 in assets placed in service

Bonus depreciation (2024 = 60%)

bonus = basis × 60%; remaining enters MACRS

$50,000 × 60% = $30,000 bonus + $20,000 to MACRS

= $30,000 bonus · $34,000 total yr 1

Bonus depreciation phases down 20%/yr: 80% (2023) → 60% (2024) → 40% (2025) → 20% (2026) → 0% (2027). Act now for maximum first-year write-off.

IRC §168(k) — TCJA bonus depreciation schedule; Tax Cuts and Jobs Act 2017

MACRS Year 1 (5-year property, half-year convention)

MACRS_yr1 = basis × year1_rate%

$50,000 × 20.00%

= $10,000 yr 1 ($50,000 total over 5yr)

Half-year convention treats all assets as placed in service at mid-year, regardless of actual date. Total MACRS deductions over the recovery period equal the full depreciable basis.

IRS Rev. Proc. 87-57 — MACRS 5-year GDS rates (200% DB switching to SL)

Best method — Year 1 comparison

best = max(S179_yr1, Bonus_yr1, MACRS_yr1)

S179: $50,000 · Bonus: $34,000 · MACRS: $10,000

= S179 — $50,000 year 1 deduction

Best method saves $11,000 in taxes at 22% bracket ($50,000 deduction × 22%). All methods give the same total deduction over time — S179/Bonus just accelerate it.

Tax savings at 22% vs 37% marginal rate

tax_saved = yr1_deduction × marginal_rate

$50,000 × [22%, 37%]

= $11,000 @ 22% · $18,500 @ 37%

Accelerated depreciation is worth more at higher marginal rates. If your rate is 37%, the same S179 election saves 68% more than at 22%. Consider timing asset purchases to higher-income years.

2024 federal marginal rates: 22% ($89k–$190k MFJ), 37% (>$731k MFJ)

Key insight

Section 179 and Bonus Depreciation both let you deduct asset costs upfront instead of over years — but they have limits. S179 is capped at net SE income (no loss carryback), while bonus depreciation can create a loss. For most contractors under $120k income buying equipment under $50k, S179 wins. Above the phase-out ($3.05M purchase price), consider bonus first.

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