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What is straight-line depreciation?

SOLVEDby TurboTax250Updated December 09, 2023

Straight-line is a depreciation method that gives you the same deduction, year after year, over the asset's useful life. The deduction amount is simply the asset's cost basis divided by its years of useful life. On a graph, the asset's value over time would appear as a straight line sloping downward, hence the name.

In contrast, the default MACRS depreciation method gives you a bigger tax deduction in the early years, while the asset is still new, and a smaller deduction toward the end of the asset's useful life.

Because most business property is depreciated with MACRS, that's the method that TurboTax applies by default. However, you can apply straight-line depreciation if you want. In fact, straight-line is the only option available for intangible assets, which can't use MACRS nor Section 179.

If you opt for straight-line depreciation:

  • It must be applied to all your assets in the same class
  • You must continue to use straight-line depreciation for the life of the asset; you can't switch to MACRS in the future

Caution: Switching to straight-line depreciation requires a comprehensive knowledge of depreciation methods, asset classes, and recovery periods. Even tax experts can get confused. For this reason, we advise against switching unless you are absolutely sure you know what you're doing.

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