Includes: Interior walls, flooring, lighting, ceilings and fit-outs in a commercial building. Watch: Excludes enlarging the building, elevators and escalators, and the internal structural framework. Qualified improvement property must use straight line, which the schedule below follows; most owners take bonus depreciation or section 179 instead.
$120,000 of interior improvements, year by year
Placed in service March 2026, 100% business use, no section 179 or bonus.
Tax year
Depreciation
2026
$4,000
2027
$8,000
2028
$8,000
2029
$8,000
2030
$8,000
2031
$8,000
2032
$8,000
2033
$8,000
2034
$8,000
2035
$8,000
2036
$8,000
2037
$8,000
2038
$8,000
2039
$8,000
2040
$8,000
2041
$4,000
Source: Pub 946 chapter 4, 15-year property item h: qualified improvement property placed in service after 2017 (any improvement to the interior of a nonresidential building after it was first placed in service). IRS Publication 946.
Frequently asked questions
What is the depreciation life of interior improvements?
Qualified improvement property (interior improvements) are 15-year property under MACRS (the General Depreciation System), depreciated with straight line, half-year. Under the Alternative Depreciation System the period is 20 years. Source: Pub 946 chapter 4, 15-year property item h: qualified improvement property placed in service after 2017 (any improvement to the interior of a nonresidential building after it was first placed in service).
Can I write off interior improvements in one year?
Section 179 lets you deduct up to $2,560,000 in 2026 (reduced above $4,090,000 of purchases), as long as the business has the income. Bonus depreciation is 100% for property acquired after January 19, 2025, under the One Big Beautiful Bill Act.
How much depreciation is $120,000 of interior improvements each year?
With no section 179 or bonus, placed in service in March 2026: $4,000 in 2026, $8,000 in 2027, $8,000 in 2028, $8,000 in 2029, and so on. The calculator above works it out for your own cost, date and business use.
Anything that changes the answer for qualified improvement property (interior improvements)?
Excludes enlarging the building, elevators and escalators, and the internal structural framework. Qualified improvement property must use straight line, which the schedule below follows; most owners take bonus depreciation or section 179 instead.