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📉 Bonus Depreciation Calculator

Calculate Year 1 bonus depreciation by tax year (40% in 2025, 20% in 2026). See phase-down schedule, tax savings, and cost segregation ROI.

📍 Property Address (optional)
InputsYour Numbers
Property Details
Purchase Price?
$
Land Value?
$
Cost Segregation Reclassification
5-Year Property ($)?
$
7-Year Property ($)?
$
15-Year Property ($)?
$
Tax Situation
Tax Year?
Federal Tax Bracket %?
%
State Tax Rate %?
%
Pro Forma: 100% Bonus Year
Alternative Year (100% Bonus)?
As-Is AnalysisCurrent
Enter values to see results
Year 1 Total Deduction
--
bonus + standard
Federal Tax Savings
--
year 1
Bonus Depreciation %
--
current tax year
Standard 27.5-yr Depr
--
annual baseline
Depreciation Build-Up
Purchase Price--
Land Value (excluded)--
5/7/15-yr Cost Seg Property--
Remaining 27.5-yr Basis--
Standard 27.5-yr Deduction--
Bonus on 5-yr Property--
Bonus on 7-yr Property--
Bonus on 15-yr Property--
Total Year 1 Deduction--
Tax Savings
Federal Savings (bracket x deduction)--
State Savings (if conforms)--
Total Year 1 Tax Savings--
Vs Standard Deduction Only--
Pro FormaAfter Plan
Enter pro forma values
At 100% Bonus
--
pre-2023 comparison
Additional Savings
--
at 100% vs current rate
Bonus Phase-Down Schedule
--
current rate
Cost Seg Study ROI
--
savings vs ~$5K study cost
Bonus Phase-Down by Year
2022 & Prior (100%)--
2023 (80%)--
2024 (60%)--
2025 (40%)--
2026 (20%)--

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1
Enter Property & Land
Total price minus land value gives your depreciable basis. Land is excluded from all depreciation calculations.
2
Enter Cost Seg Reclassification
A cost segregation study identifies which property components qualify as 5, 7, or 15-year property. These get accelerated bonus depreciation.
3
Set Your Tax Year
Bonus depreciation is phasing down: 40% in 2025, 20% in 2026. The calculator uses the correct rate for your year.
4
Enter Your Tax Bracket
The deduction saves you your marginal rate on the deduction amount. At 32%, a $75K deduction saves $24K in federal tax.
5
Check State Conformity
Many states do NOT conform to federal bonus depreciation rules. If your state doesn't conform, you will need to add back the bonus depreciation on your state return.
6
Cost Segregation Study ROI
A cost segregation study costs $4-8K for a typical residential property. The calculator shows ROI by comparing study cost to additional tax savings generated.

Bonus depreciation allows investors to deduct a large percentage of qualified property costs in the year placed in service, rather than over 27.5 years. Combined with cost segregation, it can generate $20,000-100,000+ in Year 1 deductions on a single property purchase.


The phase-down schedule: 100% through 2022, 80% in 2023, 60% in 2024, 40% in 2025, 20% in 2026, 0% in 2027 (under current law, subject to legislative changes). Each year of delay means fewer first-year deductions.


For high-income investors (especially W-2 earners paired with real estate professional status or the STR loophole), maximizing bonus depreciation in the highest-income years can be an extremely effective tax deferral strategy.

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