Prior to 2023, the bonus depreciation was 100% of the cost and you could simply select Immediate Depreciation method for both tax and accounts and their values would be the same as each other at the end of any period.
The 2023 bonus depreciation is 80% of the cost for tax depreciation.
But why is there is no option for this bonus depreciation in Accounts Depreciation in AssetAccountant™ to post into journals?
Is there a way to either reflect the same amount of Tax Depreciation in Accounts Depreciation when we import assets, or is there a way to export Tax Depreciation to make it the same as Accounts Depreciation in QuickBooks online?
Bonus Depreciation is a tax-only concept we don't have this rule in US GAAP.
It is a general recommendation that accounting treatment and tax treatment should be different as, from an accounting perspective, the asset's value should slowly decline over the asset's effective life in order to keep the balance sheet a realistic picture of the value of the business at any point in time.
However, it is possible to 'fake' this behaviour using AA's Adjustment functionality - by choosing Adjustment from the Add menu when on the Accounts tab of an asset and adding an end of financial year adjustment for the asset to bring it in line with the tax depreciation for the year.
In the case below the first year of tax depreciation will be:
- 80% of $7500 = $6,000
- 20% of the remaining $1500 = $300
Leaving a written down value of $1200 at the end of the year.
So our accounts adjustment would need to look like this in order to match tax:
AA doesn't currently support journals for the tax book, however you can use the Asset Export, Asset Summary or Asset Group Reports to export your tax figures to .csv.
If you run a report like this for the date range of the full financial year, you should be able to adjust this output to mimic a journal into QuickBooks Online.