Depreciation of Work Van?

Question

How do I depreciate a work van (normal van size) that was purchased April 06?
Cost was $17,000. In your answer, is this for the year or monthly. Using Quickbooks. .

I have read the IRS booklet, the form etc, I need to know what form of depreciation I should use.

Answer 1

The depreciation method that you'll be using is the 5 year MACRS table. Year 1 20% Year 2 32% Year 3 19.2% Year 4 11.5% Year 5 11.5% Year 6 5.8%. I know-why does a 5 year asset get depreciated over 6 years? It's because there is an automatic 1/2 year convention built into the 1st and last year's depreciation.

Also, as a side note, this table may not be the one you need. You didn't mention when your year end was. My advice is assuming that you're on a calendar year (12/31). If you're not, there's a different group of MACRS tables you'll need to use. You may want to buy TurboTax Business. There's a depreciation system built right into the program. I'm not wild about it, but it does a sufficient job calculating depreciation. It will also help you keep track of Section 179 (Asset Expense Election) options, too.

If you don't have an accountant on board, you may want to hire one. Sometimes the timing of an asset purchase between one quarter and the next or from one year to the next can save you a bundle in taxes. Accountants are expensive, but worth it!

Answer 2

Straight line for internal or book depreciation, 5 years? (Whatever you pick for your internal statements, just go with the approximate useful life).
Consider the Section 179 expense election for tax purposes. There are limits and exceptions which will bring you back to that IRS booklet....

Answer 3

Yearly, and to do that you would need form 4562. www.irs.org to look at the form.

Answer 4

go to: http://www.irs.gov/taxtopics/tc510.html