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MACRS rules

Make the most of depreciation write-offs

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in Small Business Tax,Small Business Tax Deduction Strategies

Unless you're a CPA or a tax nerd, the term MACRS can be daunting. It stands for Modified Accelerated Cost Recovery System, which is the standard federal-income tax method for depreciating the cost of your business assets. Here's an overview of the basic rules surrounding depreciation deductions under MACRS:

Different depreciation periods for different assets

Congress created MACRS in 1986 to replace a dizzying array of rules for depreciating business assets. MACRS applies to most tangible depreciable assets placed in service after 1986.

Simply put, tangible business assets are depreciable under MACRS if they wear out, have a useful life of more than one year and are used in a business or for the production of income.

However, MACRS is not used to depreciate assets when an election was made to use a depreciation method not expressed in terms of years (such as the "income-forecast method" or the "unit-...(register to read more)

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