Depreciation Tax Shield Calculator

This small business tool is used to find the depreciation tax shield by using tax rates and depreciation expenses.

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Input :

Sum of Depreciation Expenses = 10000

Tax Rate = 40%

Depreciation Tax Shield = Depreciation expense × Tax rate

Depreciation Tax Shield = 10000 × (40 / 100)

Depreciation Tax Shield = 4000

How to calculate the depreciation tax shield

A depreciation tax shield is a tax reduction technique under which depreciation expense is subtracted from taxable income.

Depreciation Tax Shield Formula

The calculation of depreciation tax shield can be obtained by depreciation expense and tax rate as shown below

Depreciation Tax Shield = Sum of Depreciation expense × Tax rate

Example :

Applicable tax rate is 21% and the amount of depreciation that can be deducted is $100,000, then the depreciation tax shield is $21,000