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Goodwill amortization

Amortized over 15 years · Straight line over 180 months, from the month acquired

Amortization period15 years180 months from the month bought
MethodStraight linethe same amount each month
Section 179Nonot for intangibles
Bonus depreciationNonot for intangibles
Built yourselfNot deductibleonly bought goodwill counts

Includes: Goodwill, going concern value, customer lists, workforce in place, supplier relationships, non-compete agreements, franchises, trademarks, trade names and government licenses bought as part of a business. Watch: Only bought intangibles are amortized: goodwill you build yourself has no cost to deduct. A non-compete signed with a business purchase is spread over 15 years however short it is. Section 179 and bonus depreciation do not apply.

Calculate your own

Deduction for 2026

$16,667
Then each month
$1,667
Each full year, 2027 to 2040
$20,000
Last year, 2041
$3,333
Total deducted
$300,000
Section 179 and bonus depreciation do not apply to intangibles.

$300,000 of goodwill, year by year

Bought in March 2026.

Tax yearDeduction
2026$16,667
2027$20,000
2028$20,000
2029$20,000
2030$20,000
2031$20,000
2032$20,000
2033$20,000
2034$20,000
2035$20,000
2036$20,000
2037$20,000
2038$20,000
2039$20,000
2040$20,000
2041$3,333

Source: Internal Revenue Code section 197(a): amortized "ratably over the 15-year period beginning with the month in which such intangible was acquired"; section 197(d) lists what counts; reported in Form 4562 Part VI. IRS Instructions for Form 4562.

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Frequently asked questions

How long is goodwill amortized for tax?

15 years (180 months), straight line, starting the month you bought it (Internal Revenue Code section 197). Customer lists, non-compete agreements, franchises, trademarks, trade names and licenses bought with a business follow the same rule.

Can I deduct goodwill in one year?

No. Section 179 and bonus depreciation do not apply to goodwill or any other section 197 intangible, so the deduction is the same amount every month for 15 years.

How much is $300,000 of goodwill each year?

$20,000 a year ($1,667 a month). Bought in March 2026: $16,667 in 2026, $20,000 a year from 2027 to 2040, and $3,333 in 2041.

Is goodwill amortized on the books too?

Not by public companies: under U.S. GAAP they test goodwill for impairment instead. A private company may elect to amortize it straight line over 10 years or less (FASB ASU 2014-02). Tax amortization is 15 years either way.

Can I amortize goodwill I built myself?

No. Only goodwill and other intangibles you bought have a cost to amortize. Goodwill built up by running the business has no tax basis.