Depreciation (MACRS)
Spread equipment costs over multiple years using IRS depreciation schedules for steady annual deductions.
Tax Form
Form 4562, Parts II-V
Estimated Savings
$500-10,000/year
IRS Reference
Publication 946
How It Works
MACRS (Modified Accelerated Cost Recovery System) is the standard method for depreciating business assets over time. While Section 179 lets you deduct everything immediately, depreciation spreads the deduction across the asset's useful life. For creators, most equipment (cameras, computers, audio gear) is 5-year property. This approach is useful when you don't have enough income to benefit from Section 179.
IRS Rules & Requirements
- Computers, cameras, video equipment: 5-year property (200% declining balance)
- Office furniture: 7-year property
- Once you start depreciating, must continue each year until fully depreciated
- Half-year convention: Get 1/2 year depreciation in year 1 (usually)
- Listed property (computers, cameras) used <50% for business requires straight-line ADS
Real Examples
$2,500 camera depreciated over 5 years: ~$500/year deduction
$1,500 computer using MACRS: Year 1 ~$300, Year 2 ~$480, etc.
$3,000 office furniture over 7 years: ~$428/year deduction
Common Mistakes to Avoid
- Not realizing depreciation is automatic - IRS assumes you took it even if you didn't
- Mixing up Section 179, bonus depreciation, and regular MACRS
- Forgetting mid-quarter convention when >40% of property placed in service in Q4
- Not understanding recapture when business use drops below 50%
Pro Tip
If your income is low this year but you expect it to grow, taking regular depreciation (instead of Section 179) spreads deductions into future higher-income years where they may save more tax.
Related Deductions
Section 179 Deduction
Deduct the FULL cost of equipment in the year you buy it instead of depreciating over multiple years.
Camera Equipment
Deduct cameras, lenses, and video equipment used for content creation.
Computer & Laptop
Computers, laptops, and peripherals used for content creation and editing.
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