4/6/22, 10:28 PMDepreciation and why it is important to your business | SBS CPA Group, Inc.
Page 1 of 2https://www.sbscpagroup.com/blog/depreciation-and-why-it-is-important-to-your-business/
SITEMAP
Mike Sylvester
Karena Sylvester
Brent Bracht
Our CPA Firm
Bookkeeping
Quickbooks Support
Payroll & Payroll Taxes
Business Formation
Business Consulting
Business Personal Property Taxes
Small Business Services
Small Businesses
Restaurant Bookkeeping
Real Estate Professionals
Niches
Tax Planning & Preparation
Documents
Links
Individual Tax Services
Resources
Blog
RECENT BLOG POSTS
06/29/21 2021 Advanced Child Tax Credit
02/12/22 Michael Sylvester, CPA quoted innational Bloomberg article concerning new IRSInternational K2/K3 reporting rules!
01/28/22 Tax Season Hours
Depreciation and why it is important toyour businessDepreciation is the reduction in the value of an asset due to usage, passage of time, wear and tear, depletion or other suchfactors. When you purchase an asset for your business and place it in service you are allowed to write off a portion of thepurchase price each year as depreciation expense.
For example, business furniture is most often depreciated over seven years so if you purchase a $700 desk on January 1stof 2008 you may take $100 worth of depreciation in 2008 and then an additional $100 per year for the next six years. Atthe end of seven years you have taken the value of the asset to zero in this example.
Depreciation is nothing more than an estimate that is made in accordance with various guidelines.
Various methods of accelerated depreciation are available to allow business owners to depreciate their assetsearlier; accelerated depreciation rules are often put into place by our elected officials in order to “encourage” businessowners to spend money on equipment which in turn increases spending.
Depreciation is an expense that will lower your companies net income. The lower your net income the less you will pay inincome taxes. Depreciation is something that you and your accountant must consider carefully when analyzing your taxsituation. It is not always best to take accelerated depreciation!
Mike Sylvester, CPA/ABV
Contact Us Nowfor more information
Keep up with whats “NEW” at the SBS CPA GROUP
NEWSLETTER SIGN-UP
name email
Phone: 260-407-5000 Fax: 260-267-9468
Our CPA Firm Small Business Services Niches Individual Tax Services Resources Blog Contact Us
4/6/22, 10:28 PMDepreciation and why it is important to your business | SBS CPA Group, Inc.
Page 2 of 2https://www.sbscpagroup.com/blog/depreciation-and-why-it-is-important-to-your-business/
Sales and Use Taxes
Tax Planning
Chief Financial Officer ServicesNewsletter Signup
Contact Us 01/28/22 Tax Season Hours
12/29/21 How to see if you have Indianaunclaimed property
OUR LOCATION
View all Posts
© 2022 Small Business Services CPA Group, Inc. SBS CPA Group • 10351 Dawsons Creek Blvd, Suite H • Fort
Wayne, IN 46825
P: 260-407-5000 F: 260-267-9468