Book vs Tax Depreciation: Why the Numbers Differ

Financial statements spread an asset's cost over its useful life. The tax return can deduct it much faster. A $50,000 machine placed in service in May 2026 with 100% bonus is 50,000.00 of tax depreciation in 2026; straight-line over 7 years with a full-month convention, the books show 4,761.90. The difference in basis is a temporary difference for deferred taxes. Assetroll keeps both schedules and shows the difference per asset.

Last reviewed 2026-10-28. General information, not tax advice. IRS Publication 946, the Form 4562 instructions and your tax adviser decide what applies.