Straight-line depreciation is the simplest depreciation method. It spreads the cost of a business asset evenly over its useful life, allowing you to deduct the same amount each year until the asset is fully depreciated.
📅 When It’s Used
✅ When you want consistent, predictable deductions every year
✅ For financial reporting purposes (such as accounting or financial statements)
✅ For certain assets where the IRS allows or requires straight-line depreciation
✅ When a taxpayer elects out of MACRS and chooses straight-line depreciation instead
⚙️ How It Works (Simple Steps)
1️⃣ Start with the cost of the asset
2️⃣ Subtract any salvage value (the expected value at the end of its useful life)
3️⃣ Divide the remaining amount by the number of years the asset will be used
🧮 Example
You buy a business laptop for $1,200 and expect to use it for 3 years.
The laptop has no salvage value.
Calculation:
$1,200 ÷ 3 years = $400 per year
✅ You deduct $400 each year for 3 years.
⭐ Why Choose Straight-Line?
✔ Easy to understand and apply
✔ Ideal for assets that lose value evenly over time
✔ Helpful when you don’t need large deductions upfront
✔ Creates stable and predictable annual expenses