What's the Difference Between Straight-Line Depreciation and Accelerated Depreciation?

When a business purchases an asset, it can write off the cost over time through depreciation, and the method it uses determines how much it deducts in each year. Straight-line depreciation spreads the cost evenly over the asset's useful life — a $10,000 machine depreciated over 10 years gives a $1,000 deduction each year. Accelerated depreciation methods, like double-declining balance, front-load the deductions so you get a larger write-off in the early years and smaller deductions later. The IRS's MACRS system (which most businesses use) is a form of accelerated depreciation, and bonus depreciation allows even faster write-offs in the first year. Accelerated depreciation is generally better for cash flow because you get the tax benefit sooner, though the total amount of depreciation over the asset's life is the same either way.