How Long to Depreciate Furniture: IRS Rules and Recovery Periods

Business furniture is depreciated over seven years if it’s used in an office or other nonresidential business setting, and over five years if it’s placed in a residential rental property. Those are the MACRS recovery periods the IRS assigns, but for furniture bought and placed in service in 2026, most businesses can skip the multi-year schedule entirely and deduct the full cost in year one through Section 179 or 100 percent bonus depreciation.

The Two Recovery Periods

Under the Modified Accelerated Cost Recovery System, the timeline depends on where the furniture is used, not what it’s made of. Desks, file cabinets, safes, and other office furniture and fixtures fall into the seven-year property class under the General Depreciation System.¹²

Getting this wrong is expensive. Depreciate a seven-year office asset on a five-year schedule and you’ve claimed deductions too fast; on audit the IRS can assess back taxes and interest. The setting decides the class.

When You Don’t Actually Wait Five or Seven Years

Three provisions let most businesses deduct furniture costs immediately or almost immediately. Check them in order before setting up a depreciation schedule.

De Minimis Safe Harbor

If your business has an applicable financial statement, such as an audited statement, you can elect to expense items costing up to $5,000 per invoice or per item. Without one, the ceiling is $2,500.³ A $400 chair or a $2,000 desk often falls under the threshold, and you don’t track depreciation on those items at all. The election is made annually on the tax return.

Section 179

Section 179 lets you deduct the full cost of qualifying furniture in the year you place it in service. For 2026, the maximum deduction is $2,560,000, phasing out dollar-for-dollar once total qualifying property placed in service during the year exceeds $4,090,000.⁴ The furniture must be used in an active trade or business, and the deduction can’t create or increase a net operating loss.⁵ You can also expense only part of a purchase under Section 179 and depreciate the rest, which helps when a full write-off would waste deductions against low income.

100 Percent Bonus Depreciation

The One, Big, Beautiful Bill Act of 2025 restored permanent 100 percent bonus depreciation for qualified property acquired after January 19, 2025. Furniture placed in service during 2026 can be fully deducted in year one with no dollar cap.⁶ Unlike Section 179, bonus depreciation can generate a net operating loss that carries forward. You can also elect out of bonus depreciation for a class of property if spreading the deduction over the full recovery period suits you better.⁷

How the Annual Deduction Is Calculated

If you do use MACRS instead of expensing, both the five-year and seven-year classes default to the 200 percent declining balance method. Deductions are front-loaded, larger in the early years and smaller later. The IRS automatically switches to straight-line in the year that produces an equal or larger deduction.¹ You can also elect straight-line from the start for equal annual deductions. Once you pick a method for an asset, you’re locked in for its recovery period.

The half-year convention is the standard timing rule. No matter when during the year you actually buy the furniture, the IRS treats it as placed in service at the midpoint. Half a year of depreciation is claimed in both the first and last years, so a seven-year asset actually generates deductions across eight tax years.¹

One exception. If more than 40 percent of all MACRS property you place in service during the year goes into service in the last three months, the mid-quarter convention applies instead, calculating depreciation from the specific quarter each asset was acquired.¹ The rule discourages December buying sprees purely for tax benefits and usually produces a smaller first-year deduction on those late purchases.

Built-In Items Are Not Furniture

Custom shelving, built-in cabinetry, and similar improvements to a commercial building’s interior are generally treated as qualified improvement property, not furniture, and follow a 15-year recovery period.¹ Freestanding desks and chairs use the seven-year schedule; a built-in reception counter or wall-mounted storage system that becomes part of the interior falls under QIP. QIP does qualify for both Section 179 and bonus depreciation, so the longer recovery period only matters if you’re not expensing the cost.

What Happens When You Sell the Furniture

Depreciation lowers your tax basis over time, and the IRS reclaims some of the benefit when you dispose of the asset. Under Section 1245, any gain on the sale of depreciated business furniture is taxed as ordinary income up to the total depreciation you previously claimed.⁸

An example. Buy a $10,000 conference table, fully depreciate it to a $0 basis, then sell it for $3,000, and the entire $3,000 is recaptured as ordinary income rather than capital gains. Claim only $7,000 in depreciation and sell for $5,000, and the $2,000 gain is all ordinary income. Report the sale on Form 4797, using Part III for the recapture.⁹ Recapture applies whether the deductions came from the standard MACRS schedule, Section 179, or bonus depreciation.

Mixed Personal and Business Use

Furniture used partly for personal purposes is only depreciable on the business-use share. A home-office desk used 70 percent for business is depreciated on 70 percent of its cost. Furniture is not listed property, so it avoids the stricter documentation rules that apply to vehicles.¹ However, if you took a Section 179 deduction and business use later drops to 50 percent or less during the recovery period, part of that deduction gets recaptured as ordinary income on Form 4797 in the year the use falls.

Reporting and Records

Depreciation is reported on Form 4562. File it any year you place new depreciable property in service, claim a Section 179 deduction, or report depreciation on listed property.¹⁰

For each piece of furniture, keep track of:

The date placed in service, meaning the day the furniture was available and ready for its intended use, which is not always the purchase date. A desk sitting in a warehouse during a buildout isn’t placed in service until it’s set up and usable.
Cost basis, including the purchase price, sales tax, delivery, and any assembly or installation charges.
Business-use percentage for anything with mixed use.
The asset class and recovery period assigned, five-year or seven-year.

Hold on to receipts, invoices, and delivery confirmations. Without documentation, the IRS can disallow depreciation deductions entirely and assess back taxes with penalties. Those records also matter years later when you sell or scrap the furniture and need an adjusted basis.

State Rules May Differ

Federal depreciation is only half the picture. Roughly 18 states fully conform to federal bonus depreciation, but more than half either limit or disallow it for state tax purposes. Some cap the deduction at a fixed dollar amount; others require the standard MACRS schedule regardless of the federal claim. Section 179 conformity varies similarly. If your business files in more than one state, check each state’s current conformity rules before assuming the federal deduction carries over unchanged.

1
Internal Revenue Service. Publication 946 (2025), How To Depreciate Property
2
Office of the Law Revision Counsel. 26 U.S.C. 168 – Accelerated Cost Recovery System
3
Internal Revenue Service. Tangible Property Final Regulations
4
Internal Revenue Service. Rev. Proc. 2025-32
5
Office of the Law Revision Counsel. 26 U.S.C. 179 – Election to Expense Certain Depreciable Business Assets
6
Internal Revenue Service. Treasury, IRS Issue Guidance on the Additional First Year Depreciation Deduction Amended as Part of the One, Big, Beautiful Bill
7
Internal Revenue Service. Notice 2026-11, Interim Guidance on Additional First Year Depreciation Deduction
8
Office of the Law Revision Counsel. 26 U.S. Code 1245 – Gain From Dispositions of Certain Depreciable Property
9
Internal Revenue Service. Instructions for Form 4797
10
Internal Revenue Service. Instructions for Form 4562 (2025)