How to Use QuickBooks to Calculate Depreciation?

1

• Depreciation is a tax-deductible expense that
  businesses can use to reduce their taxable income
  over the life of an asset. In this QuickBooks
  tutorial, we'll show you how to calculate
  depreciation using the company's accounts and
  reports.
• What is Depreciation?
• Depreciation is a tax deduction that allows
  businesses to reduce their taxable income by
  deducting the cost of an asset, such as a car,
  over its estimated lifetime. How to record
  depreciation based on the principle that an asset
  is worth less after it's used and worn down over
  time. There are several ways to figure
  depreciation, including using a software program
  such as QuickBooks. Here's how to calculate
  depreciation using QuickBooks
• Open QuickBooks and create a new account.
• Enter the purchase price (or original value) of
  the asset into the "Enter New Cost" field.
• Enter the number of years the asset will be used
  in the "Years Used" field.
• Enter the depreciation rate in the "Depreciation
  Rate" field (this will be determined by your tax
  brackets).
• Click on the "Depreciation Schedule" button and
  select the type of depreciation you would like to
  use (straight line or declining balance).
• Click on the "Calculate Depreciation" button and
  wait for the results to appear in the "Summary"
  window.
• How to Calculate Depreciation using QuickBooks?
• If you're like most business owners, you use
  QuickBooks to manage your finances. You probably
  use it to track your profits and losses, prepare
  your tax returns, and more. But did you know how
  to record depreciation expense in quickbooks?
  Depreciation is a tax deduction that businesses
  can claim on their taxable income. In this
  article, we'll show you how to calculate
  depreciation using QuickBooks.
• First, open QuickBooks. Then, click the "File"
  menu option and select "Create Income Statement."
  On the Income Statement screen, click the
  "Depreciation" tab.

2

• The first step in calculating depreciation is to
  identify the asset that you're depreciating. In
  most cases, this will be a physical asset (like a
  piece of equipment). However, if the asset is
  intangible (like copyright or trade secret
  rights), then you'll need to identify the
  underlying basis (the cost at which you acquired
  the right).
• Once you've determined the asset's identification
  code and its underlying basis, you'll need to
  determine its depreciable period. This is simply
  how long the asset will be used before it can be
  written off as expenses. Generally speaking,
  assets that are used for short periods of
• Tips for Calculating Depreciation
• If you're thinking about how to record
  depreciation, QuickBooks can be a helpful tool.
  Here are five tips for using QuickBooks to
  calculate depreciation
• Start by creating a new account in QuickBooks and
  importing your business data. This will give you
  a baseline for calculating depreciation.
• Use the "Depreciation" report to track your
  depreciation expenses and expenses related to
  amortization of capitalized costs.
• Use the "Entering Depreciation" wizard to
  calculate depreciation on new equipment,
  vehicles, and other depreciable assets.
• Use the "recording depreciation for Property and
  Equipment" wizard to determine which expenses are
  deductible when calculating depreciation (such as
  research and development costs).
• Review your calculations periodically to make
  sure you're accurately tracking your depreciation
  expenses and amortization of capitalized costs.
• Conclusion