help on depreciation for tax purposes

Discussion in 'Business Operations' started by redhedder, Apr 2, 2009.

  1. redhedder

    redhedder LawnSite Member
    Messages: 4

    I am currently doing my taxes. I have a small business. One exmark 46 in (08 model). I have a Stihl comercial weedeater (07 mod) several trimmers and hedge tools. How can I figure what they are worth and how much I can count off for depreciation? Thank you so much for your help
  2. ALC-GregH

    ALC-GregH LawnSite Fanatic
    from PA
    Messages: 7,051

    If I remember right, you figure what the useful life is of the equipment and divide the price to get your write off annually. That's kind of a guess. I can't remember what the accountant told me.
  3. Ruben Rocha

    Ruben Rocha LawnSite Senior Member
    Messages: 577

  4. Fvstringpicker

    Fvstringpicker LawnSite Fanatic
    Messages: 7,663

    Equipment has a half year convention meaning you take 6 months the year of the purchase and 6 months final year of life. The depreciation table are automatically set up to calculate this convention. i.e seven year equipment is 20% the first year. You simply multiple the cost by the percentage rate in the table. Landscape equipment has a 7 year life. The amount you depreciate is essentially your cost, not the value of the equipment. Bear in mind you can also take section 179 expense the year pf purchase rather than depreciation over the IRS recovery period.
  5. TMK

    TMK LawnSite Member
    Messages: 35

    I believe 2009 is the last year for the Section 179 expense deduction_run the #'s to see if it would be beneficial for you to use the 179 as I believe full deduction can be taken
  6. CLPS

    CLPS LawnSite Member
    from Midwest
    Messages: 28

    There are three main methods of depreciation, straight-line being by far the most widely used. To calculate your straight-line depreciation expense for this year, take the purchase price of the item, subtract the residual value (value upon disposal after its useful life), and divide by its useful life in years. The residual value and useful life are pretty arbitrary amounts, but your equipment probably has a 5-7 year useful life, and maybe the mower is worth $1000 after its useful life.

    The purpose of depreciating equipment is to spread out its initial cost over its useful life, so depreciating something is probably only worth it if it cost a significant sum, maybe $1000-2000 or higher. For smaller equipment purchases it would most likely be more benificial to expense it the year it was purchased with a section 179.

    TurboTax does it all for you but it's always best to talk to an accountant.

    Little late but now you know.
  7. johnaandp

    johnaandp LawnSite Member
    from Texas
    Messages: 23

    We just take the one time 50% deduction on our equipment in the tax year we purchase it in. That seems to be the easiest way for us although we prob. leave $$$ on the table doing it that way.
  8. bohiaa

    bohiaa LawnSite Fanatic
    Messages: 5,220

    Just claim the exmark, NOT the hand tools, there NOt worth it....

    Claim them as a hole and NOT a Depreciation value.....
  9. Big C

    Big C LawnSite Bronze Member
    Messages: 1,642

    That's what my accountant told me to do just claim the whole thing my first much bullsh!t to remember from year to year.

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