Author: Robert K Valentine Jr.
Depreciation planning runs on a handful of numbers that the IRS updates every year — how long an asset must be depreciated, how much of a luxury vehicle you can write off, and how large a Section 179 deduction you can claim before it starts phasing out. Those numbers are scattered across different Revenue Procedures and buried in instructions, which makes them easy to misremember or look up under time pressure. This page collects the current figures and the last four years of history in one place, so you always have a quick answer. It covers tax years 2023 through 2026 and will be updated as the IRS releases new amounts for future years.
Typical MACRS Recovery Periods by Asset Type
Recovery periods under the General Depreciation System (GDS) are set by asset class rather than by year, so this table doesn’t change annually the way the others below do. It’s included here as a reference for the property classes that come up most often in a typical fixed-asset ledger.
| Asset Type | GDS Recovery Period | Typical Depreciation Method |
|---|---|---|
| Automobiles (passenger cars) | 5 years | 200% declining balance (subject to the Section 280F luxury auto limits below) |
| Trucks (light-duty, GVWR ≤ 13,000 lbs) | 5 years | 200% declining balance |
| Computer equipment | 5 years | 200% declining balance |
| Office furniture and fixtures | 7 years | 200% declining balance |
| Personal property with no assigned class life | 7 years (statutory default) | 200% declining balance |
| Land improvements (fences, sidewalks, landscaping, parking lots) | 15 years | 150% declining balance |
| Residential real property (rental housing) | 27.5 years | Straight-line |
| Commercial real property (nonresidential) | 39 years | Straight-line |
Luxury Passenger Vehicle Depreciation Limits (Section 280F): 2023–2026
Section 280F caps the depreciation deduction allowed for passenger automobiles (a category that, for this purpose, includes light trucks and vans) regardless of what MACRS would otherwise allow. The IRS publishes separate first-year limits depending on whether bonus depreciation is claimed, and a single schedule of limits for each year afterward — Year 4 and every year after it are capped at the same amount shown below.
| Placed in Service | Year 1 (With Bonus Depreciation) | Year 1 (No Bonus Depreciation) | Year 2 | Year 3 | Year 4+ |
|---|---|---|---|---|---|
| 2023 | $20,200 | $12,200 | $19,500 | $11,700 | $6,960 |
| 2024 | $20,400 | $12,400 | $19,800 | $11,900 | $7,160 |
| 2025 | $20,200 | $12,200 | $19,600 | $11,800 | $7,060 |
| 2026 | $20,300 | $12,300 | $19,800 | $11,900 | $7,160 |
Section 179 Deduction Limits: 2023–2026
Section 179 lets a business expense the full cost of qualifying property in the year it’s placed in service, up to an annual dollar cap. That cap phases out dollar-for-dollar once total qualifying purchases for the year exceed the threshold below, and disappears entirely once purchases reach the “fully phased out” amount. The jump between 2024 and 2025 reflects the higher limits enacted by the One Big Beautiful Bill Act (OBBBA), effective for property placed in service in tax years beginning after December 31, 2024.
| Tax Year | Maximum Section 179 Deduction | Phase-Out Threshold Begins | Deduction Fully Phased Out At |
|---|---|---|---|
| 2023 | $1,160,000 | $2,890,000 | $4,050,000 |
| 2024 | $1,220,000 | $3,050,000 | $4,270,000 |
| 2025 | $2,500,000 | $4,000,000 | $6,500,000 |
| 2026 | $2,560,000 | $4,090,000 | $6,650,000 |
Section 179 Cap for Heavy SUVs (6,000–14,000 lb GVWR): 2023–2026
Sport utility vehicles with a gross vehicle weight rating between 6,000 and 14,000 pounds aren’t subject to the Section 280F luxury auto limits above, but Section 179(b)(5) caps how much of their cost can be expensed in the first year. Any remaining cost above the cap is still depreciable under the normal MACRS rules (and may qualify for bonus depreciation).
| Tax Year | Maximum Section 179 Deduction for Qualifying Heavy SUVs |
|---|---|
| 2023 | $28,900 |
| 2024 | $30,500 |
| 2025 | $31,300 |
| 2026 | $32,000 |
This page is for general informational purposes only and does not constitute tax or legal advice. Figures above are drawn from IRS Rev. Proc. 2023-14, Rev. Proc. 2024-13, Rev. Proc. 2025-16, and Rev. Proc. 2026-15 (Section 280F luxury auto and lease inclusion amounts); Rev. Proc. 2022-38 and Rev. Proc. 2023-34 (Section 179 inflation adjustments for 2023 and 2024); and IRC Section 179(b), as amended by the One Big Beautiful Bill Act (Pub. L. 119-21) and further adjusted for inflation by Rev. Proc. 2025-32, for the 2025 and 2026 Section 179 amounts. Always confirm current-year amounts with the IRS or a qualified tax professional before relying on them for a specific return.
Track These Limits Automatically: Depreciation Calculator Pro II keeps luxury-auto, Section 179, and bonus depreciation limits built into its calculations, so you don’t have to cross-reference a table like this one every time you add an asset to your books.