My husband is a general contractor and we just started a residential/commerical construction business. We make a lot of small equipment and large tool purchases around $500-$2000 dollars. I want to take this full deduction this year (De Minimis Rule) rather than depreciating it over several years (Thank you Donald Trump!!!!). There are too many tools to deal with depreciating these and deducting over several years.
My questions is how do I enter this in quickbooks? Whether I take the full deductible now or partial deductible over several years, they are still fixed assets. I categorized these under fixed assets. However, they are no longer showing up on the Profit and Loss statement. I want them to show up as expenses to show our true net income and true profits, but I ALSO want them to show up as fixed assets. Is there a way to do this without screwing up my books?
Thank you Rustler for your response! I will be fully expensing these tools this year because there are so many. We have purchased 10-15 large tools this month alone. I am very new to quickbooks and definitely not an accountant. I have a couple questions...
Q1 - Why would the tools have a zero balance on the books as an asset? I mean technically these tools are assets. We took money (asset) and put them into tools....so wouldn't the asset just switch from cash to tools on the balance sheet? Sorry if this is a dumb question!
Q2 - Is the depreciation number going up or down? Is it showing the amount the tool has decreased in value or the amount we have deducted on our taxes?
Q3 - If we use the de minimis amount and the tools will show a zero balance on our balance sheet, could we also just categorize these tools as an expense like this?