3-year (36-month) property · Straight line over 36 months
Includes: Software bought off the shelf or licensed non-exclusively and not substantially modified. Watch: Software that comes bundled with a computer is depreciated with the computer. Software bought as part of a business acquisition is a 15-year section 197 intangible.
Placed in service March 2026, 100% business use, no section 179 or bonus.
| Tax year | Depreciation |
|---|---|
| 2026 | $2,500 |
| 2027 | $3,000 |
| 2028 | $3,000 |
| 2029 | $500 |
Source: Pub 946 chapter 1, computer software: straight line over 36 months; chapter 2, off-the-shelf computer software is section 179 property. IRS Publication 946.
Off-the-shelf software is depreciated (amortized) straight line over 36 months from the month it is placed in service (IRS Publication 946). It can also be expensed in full with section 179 or bonus depreciation.
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.
With no section 179 or bonus, placed in service in March 2026: $2,500 in 2026, $3,000 in 2027, $3,000 in 2028, $500 in 2029. The calculator above works it out for your own cost, date and business use.
Software that comes bundled with a computer is depreciated with the computer. Software bought as part of a business acquisition is a 15-year section 197 intangible.