Why should you become familiar with calculating the depreciation of your business assets? This can help you increase your understanding of your business tax return and become more fully prepared when it comes to tax time. To calculate your depreciation, there are three commonly used methods in small business accounting.
Each method uses a formula specific to the type of asset. Straight line, double declining, and units of production methods are better fitted for various assets based on useful life, asset category, and others respectively. Make sure to use correct values and ensure the accuracy of your calculations.
In small business accounting, it is important to understand further regulations and tax codes about depreciation. Speaking with your small business accounting can help you get on the right track for tax preparation. Be sure to check back frequently for our next post in the series about depreciation.