Turn on suggestions
Auto-suggest helps you quickly narrow down your search results by suggesting possible matches as you type.
Showing results for
Connect with and learn from others in the QuickBooks Community.
Join nowI am very new to quickbooks and need some help.
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?
You need to structure the accounts correctly for this to work well
fixed assets - tools
>>tool one
>> >> depreciation tool one
>> tool two
>> >> depreciation tool two
then at tax time you do a journal entry
debit depreciation expense, (for the total of the credits)
credit depreciation tool one, $$$
credit depreciation tool two, $$$$
If you use the de minimus amount, on the balance sheet it would look like (after the journal entry_
tool one, $2,200
>> depreciation tool one, $2,200
and
depreciation expense would show $2,200 on the P&L
tool one is now fully depreciated and sits on the balance sheet at zero book value until you sell or scrap it, it will most likely have some scrap or used tool value at that time.
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?
>>expense - tools <$2,500
I hope these make sense! Thank you again!
You have clicked a link to a site outside of the QuickBooks or ProFile Communities. By clicking "Continue", you will leave the community and be taken to that site instead.