MACRS Depreciation | StraightUp Solar (2024)

For those new to business ownership:

As a large purchase that will be used overtime, a solar system’s cost is deducted from taxable income via a so-called 5 year ‘depreciation’ (rather than 100% immediately as a direct ‘expense’). While 26% of the cost is recovered directly as a credit against tax liability for the year of installation (see above), the law nonetheless allows 85% of the full system cost (rather than 70%) to be deducted from taxable income over time via ‘depreciation. Depending on the tax bracket, roughly 12-25% of original system price may be recouped this way.

For more information on the federal MACRS & Bonus, seeIRS Publication 946, and IRS Form 4562.IRS Brief Overview of Depreciation

Always contact a trusted tax professional to verify eligibility in business’s specific case.