Account Mapping to Schedule C Tax Line for Section 179 Expense

bvjh · ‎December 10, 2018

Our company recently purchased a truck that we need to expense on our Schedule C tax line “Depreciation and Section 179 Expense Deduction”

I have tried to create an account to capture the Section 179 Expense line on our Schedule C. When I map the account to a tax line, Schedule C Depreciation and Section 179 Expense Deduction is not an option in the drop down list.

Is there a way for me to map an account to this Schedule C tax line (or to Form 4562 which would then populate that line on Schedule C)?

Thanks for any advice you can offer.

SkinnyRaven · ‎December 10, 2018

The tax lines available are driven by your business type and the tax form selected in your preferences.

View solution in original post

SkinnyRaven · ‎December 10, 2018

The tax lines available are driven by your business type and the tax form selected in your preferences.

bvjh · ‎December 10, 2018

Agreed. We chose 1040 tax form preference and have all the Sched C lines available for account mapping except this one. Thanks for your input!

Rustler · ‎December 10, 2018

@ bvjh
you should have a fixed asset account for the truck, then a sub account, also fixed asset type called accumulated depreciation-truck

at the end of the year you post a journal entry (regardless of whether you take section 179 or annual depreciation)
debit depreciation expense
credit accumulated depreciation-truck

the truck and the associated depreciation account remains on the books until you dispose of the truck.

QB does not do depreciation entries for you.

RekaUjj · ‎December 10, 2018

Additionally, the expenses for depreciation normally does not have a tax line in QB. Tax lines are needed only if you pull your QB information into TurboTax. This tax preparation software is supposed to take care of the depreciation calculation.

Reka

bvjh · ‎December 10, 2018

My take away is that I should create a workaround to capture this transaction in QB for year end tax reporting because the software does not support the mapping option I am seeking. Thanks for your input!

RekaUjj · ‎December 10, 2018

You do not necessarily have to map all the accounts in QB. So you can just set up a Depreciation Expense and an Accumulated Depreciation contra-fixed asset account, then record a journal entry debiting the expense and crediting the Accum. Deprn, the way how Rustler explained in his reply.

Reka

GWilliams01 · ‎January 15, 2019

That is not correct. Check out QB desktop, edit the Depreciation Expense for tax line mapping.

marlenaya · ‎October 02, 2019

I have the same problem.

Jdds · ‎January 18, 2020

@Rus Revisiting this, is this the correct approach:

Upon purchasing the fixed asset, let's say a truck for $8,000:

1. Credit "Fixed Asset:Truck" account for $8k

2. Debit: Checking account for $8k

3. Create "Accumulated Depreciation:Truck" account with no balance.

Then, at the end of the year, the journal entry:

4. credit "Accumulated Depreciation:Truck" account for $8k bringing the balance to -$8,000

5. Debit "Depreciation Expense" account for $8,000.

Correct?

Then when I sell the truck,

6. Credit checking account for the amount made, and

7. Debit Accumulated Depreciation:Truck by the amount made, leaving the balance

What then do I do at the end of the year for the journal entry with that remaining balance in Acc. Dep. account?

Thanks!

jdds1 · ‎January 27, 2020

Revisiting this, is this the correct approach: