Subscribe to Inc. magazine
OPERATIONS

Track Hardware Depreciation

Advertisement

Most electronic equipment -- e.g., computers, fax machines, telephones -- has a five-year life on tax depreciation schedules. After that, it's considered worthless. Although it's a lot harder to keep tabs on a phone than a truck, keeping track of your small equipment can pay off at tax time.

Accountants advise tracking individual pieces of equipment from the day they're purchased. Why? Suppose a company buys 10 PCs at different times over the years and that three of them are tossed for upgrades. If the company hasn't tracked the individual machines, it will defer realizing the full value of the depreciation on the three that were tossed and will have to wait until the entire class is depreciated.

A tracking system also pays off should a machine disappear. A company that takes inventory regularly will realize when a laptop is missing, and it will be positioned to deduct its undepreciated value. A simple way to do it is to put bar codes on all your hardware and scan the numbers into a computer spreadsheet program.




Register on Inc.com today to get full access to:
All articles  |  Magazine archives | Livestream events | Comments
EMAIL
PASSWORD
EMAIL
FIRST NAME
LAST NAME
EMAIL
PASSWORD

Or sign up using: