How to claim accelerated vs. gradual depreciation for business computers
A new computer used in your tutoring business can usually be recovered in one of three ways: section 179 expensing, bonus depreciation, or regular MACRS depreciation over five years. The right method depends on whether the computer is used in the active conduct of the business, whether you elect out of immediate expensing, and whether you want a full or partial first-year deduction. 26 U.S.C. § 179 26 U.S.C. § 168
Bottom line
If the computer is used more than 50% for your tutoring business and is placed in service in the business, you may generally:
- Expense all or part immediately under 26 U.S.C. § 179;
- Take bonus depreciation if available for the year the computer is placed in service; or
- Depreciate it gradually under 26 U.S.C. § 168 over the applicable recovery period, which for a computer is generally 5 years.[1][2]
How the methods work
| Method | Effect | Key limits |
|---|---|---|
| Section 179 | Deduct all or part of the cost in the year placed in service | Must be acquired for use in the active conduct of a trade or business; deduction is subject to annual dollar limits and taxable-income limits.[1] |
| Bonus depreciation | Deduct a percentage of remaining cost in year placed in service | Applies only if the property qualifies under the bonus-depreciation rules; IRS states qualified property may receive additional first-year depreciation.[1] |
| MACRS depreciation | Spread cost over 5 years | Used if you do not elect immediate expensing or bonus depreciation, or for the remaining unrecovered basis.[1][2] |
Practical approach for a tutoring business
1. Confirm business use
The computer must be used in your tutoring business to qualify for business depreciation. IRS guidance states business property may be depreciated if it is used in a trade or business, and section 179 applies to property acquired for use in the active conduct of a trade or business.[1][2]
2. Decide whether to expense now
If you want the biggest first-year deduction, consider section 179. Under 26 U.S.C. § 179, you may elect to treat the cost of qualifying business property as an expense in the year it is placed in service, subject to the annual limits and business-income limitation.[1]
For 2025, the IRS states the maximum section 179 deduction is $2,500,000, phased down once total qualifying purchases exceed $4,000,000.[1][3]
3. If you do not expense it, depreciate it over time
If you do not elect section 179, or if you choose not to take full bonus depreciation, you can depreciate the remaining basis under MACRS. Computers are generally 5-year property under 26 U.S.C. § 168.[1][4]
Example
If you buy a $2,000 computer for tutoring:
- Section 179: potentially deduct the full $2,000 in the year you place it in service, if you have enough business income and make the election.[1]
- Bonus depreciation: if applicable for the year, deduct a large percentage of the remaining basis in year one.[1]
- MACRS: spread the deduction over 5 years under the applicable recovery schedule.[1][4]
Recordkeeping
Keep records showing:
- purchase date and cost,
- date placed in service,
- percent business use,
- how the computer is used in tutoring,
- copies of receipts and depreciation elections.[2]
Important caution
If the computer is used partly for personal purposes, only the business-use portion is depreciable. Also, if you elect section 179 and/or bonus depreciation, that choice affects your tax basis and future depreciation deductions.[1][2]
If you want, I can also provide a tutoring-business-specific deduction worksheet showing how to compute section 179, bonus depreciation, and MACRS for a computer purchase.