The methods
- Straight-line: the same amount every year, (cost − salvage) ÷ life.
- Double declining balance: twice the straight-line rate applied to the remaining book value, so more in the first years.
- Sum of the years’ digits: also front-loaded, but more gently.
For US taxes, most business property uses MACRS, which has its own IRS tables.
Example
A $30,000 vehicle with a $5,000 salvage value over 5 years depreciates $5,000 a year with the straight-line method.
Frequently asked questions
What is salvage value?
What you expect to sell the asset for at the end of its useful life.
See also
Results are estimates for information only and are not financial, legal or medical advice. Rates, taxes and fees vary — confirm with a professional or your lender.