How to Book Section 179 Depreciation in QuickBooks
If both your companies are sole proprietorships, you can use one QuickBooks file and create classes to track their separate revenue and expenses. This is particularly handy if you’re using the same checking and/or credit card accounts for both businesses. Having separate files sharing a checking account would be a bookkeeping nightmare! If classes aren’t turned on in your file yet, go to Edit > Preferences > Accounting > Company Preferences and check the box next to Use class tracking. Then go to Lists > Class List, click the Class button and select New and create a class for each of your businesses.
You should book your equipment purchases to a fixed asset account. If you know for certain you’ll be fully depreciating them using Section 179, you can also create a depreciation expense offset by an Accumulated Depreciation fixed asset account (which always has a negative balance). You can either do this as a journal entry (debit the expense account and credit the accumulated depreciation account) or right on the bill or check you used to purchase the equipment. In this case, you’d enter a positive amount for the equipment fixed assets account, a negative amount to the accumulated depreciation account, and a positive amount to the expense account.
I’d call the depreciation expense something like Section 179 Depreciation so it’s clear what it is especially if you have any regular depreciation that can’t be fully depreciated using Section 179, like vehicles.
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