MACRS 5-Year Property — Depreciation Schedule 2025 & 2026
5-year MACRS property includes cars, light trucks, computers, and office equipment. Depreciated over 6 tax years under the half-year convention using accelerated rates from IRS Publication 946 Table A-1.
Recovery period
5 years
half-year convention
Section 179 eligible?
Yes
Up to $2,560,000 in 2026
Bonus depreciation
100%
Post-OBBBA (on/after 2025-01-20)
What qualifies as 5-Year property?
- Automobiles, taxis, and light general-purpose trucks
- Computers and peripheral equipment (laptops, servers, monitors)
- Office machines (copiers, scanners, printers, fax)
- Certain technology, R&D, and manufacturing equipment
- Appliances, carpets, and furniture used in rental property
- Tractors and heavy trucks used in construction or trade
Source: IRS Publication 946, Table A-1. If your asset is not explicitly classified, consult Rev. Proc. 87-56 asset-class tables or default to 7-year property.
MACRS depreciation schedule — $50,000 asset
Worked example: a $50,000 property placed in service with no Section 179 and no bonus depreciation, showing the raw 5-Year MACRS schedule.
| Tax year | Rate | Deduction | Accumulated | Book value |
|---|---|---|---|---|
| 1 | 20.00% | $10,000.00 | $10,000.00 | $40,000.00 |
| 2 | 32.00% | $16,000.00 | $26,000.00 | $24,000.00 |
| 3 | 19.20% | $9,600.00 | $35,600.00 | $14,400.00 |
| 4 | 11.52% | $5,760.00 | $41,360.00 | $8,640.00 |
| 5 | 11.52% | $5,760.00 | $47,120.00 | $2,880.00 |
| 6 | 5.76% | $2,880.00 | $50,000.00 | $0.00 |
Rates from IRS Publication 946 Table A-1. Computed at build time — no hardcoded schedules.
With §179 + 100% bonus depreciation
For a $50,000 asset placed in service in 2026, electing §179 expensing (up to $2,560,000) plus 100% bonus depreciation on the remaining basis.
§179 deduction
$50,000
Immediate expensing
Bonus depreciation
$0
On remaining basis after §179
First-year total
$50,000
100.00% of basis
With §179 capped at the full asset cost and 100% bonus on the rest, a 2026 purchase can be nearly fully expensed in year one — subject to business-income limitations for §179 and placed-in-service date for bonus depreciation.
Section 179 and bonus depreciation — 2025 vs 2026
| Parameter | 2025 (OBBBA) | 2026 (indexed) |
|---|---|---|
| §179 deduction limit | $2,500,000 | $2,560,000 |
| §179 phase-out threshold | $4,000,000 | $4,090,000 |
| Bonus depreciation (post-2025-01-20) | 100% | 100% |
| Bonus depreciation (pre-2025-01-20) | 40% (TCJA phase-down) | — |
| Applies to this asset class? | ✓ §179 + bonus | ✓ §179 + bonus |
Source: One Big Beautiful Bill Act (signed July 2025) and IRS Rev. Proc. 2025-32 (2026 inflation adjustments). Pre-OBBBA property uses TCJA phase-down: 80% (2023), 60% (2024), 40% (2025 pre-1/20).
Common mistakes and gotchas
- "Listed property" (autos, cell phones before 2018) has its own first-year caps — the standard MACRS 5-year schedule does not automatically apply.
- Section 280F luxury-auto limits override MACRS when applicable: passenger vehicles and certain SUVs have first-year bonus caps (e.g., $20,400 for 2024 passenger autos).
- Qualified property placed in service before 2025-01-20 uses the TCJA phase-down bonus rate (40% in 2025), not the OBBBA-restored 100%.
- The half-year convention assumes property is placed in service mid-year. If >40% of depreciable basis is placed in the last 3 months, the mid-quarter convention applies instead.
Frequently asked questions
Is a computer 5-year or 7-year MACRS property?
Computers, peripheral equipment, and most technology hardware are 5-year property under MACRS. 7-year property covers office furniture and most general machinery.
Does Section 179 apply to 5-year MACRS property?
Yes — 5-year property is typically eligible for §179 expensing. For 2025 the limit is $2,500,000 (with phase-out starting at $4,000,000); 2026 indexed amounts are $2,560,000 / $4,090,000 per IRS Rev. Proc. 2025-32.
Can I claim 100% bonus depreciation on a business vehicle?
Yes for qualifying heavy SUVs, trucks, and vans over 6,000 lbs GVWR placed in service after January 19, 2025 — OBBBA restored 100% bonus depreciation. Passenger autos are capped under §280F luxury-auto limits regardless.
What is the 5-year MACRS depreciation schedule?
Under the half-year convention: 20.00% year 1, 32.00% year 2, 19.20% year 3, 11.52% year 4, 11.52% year 5, 5.76% year 6. Six tax years total because the half-year convention splits the first year across years 1 and 6.
Other MACRS asset classes
MACRS 7-Year Property
7-year recovery · half-year convention · Table A-1
MACRS 15-Year Property
15-year recovery · half-year convention · Table A-1
MACRS 27.5-Year Residential Rental Property
27.5-year recovery · mid-month convention · Table A-6
MACRS 39-Year Nonresidential Real Property
39-year recovery · mid-month convention · Table A-7a
Sources
Related Calculators
Depreciation Calculator
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IRS standard rates (business/medical/charity), actual vs standard