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| *Ostroff, Fair and Company>>>Other Taxes |
The method used to calculate depreciation for federal income tax purposes is what? |
The method used to calculate depreciation for federal income tax purposes is what? The method used to calculate depreciation for federal income tax purposes is what you pay your accountant to figure out for you. For example, the first thing you ask is do you have to depreciate at all. Many purchases, say of a computer, may qualify for an IRS section 179 deduction. This lets you take the entire cost including all the little things you get with it as an expense the year you buy it! Section 179 can be used for each major purchase that you make so you don麓t go bananas keeping track of depreciation schedules. For each item in 2005, you could use 179 for the first 100,000. But this number moves around each year and the total amount you can take changes too. So if there is a bunch of money at stake, get a tax guy to help. If you just bought one computer, desk, chair and fly swatter for the kids, don麓t sweat bullets. Section 179 is the method for you!!! Hope that is some help. Good Luck. When you purchase an item, say a computer, for your business, the government allows you to depreciate the value of that purchase over its lifetime. In each year of its valid life (say a computer has a useful life of 4 years), you are allowed to deduct 25% of its purchase cost each year. But the rules are strict, so it must be done correctly, or the deduction will be disallowed. |
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