Frequently Asked Questions (FAQ)

Is depreciation a fixed cost?
How do you record depreciation?
Your depreciating assets will be listed on your business’s income statement, which details your business’s income and any expenses over a certain period. The asset will be considered an expense, therefore reducing your net income, which, in turn, reduces your tax bill.
What is accumulated depreciation?
Your total amount of depreciation over all of your business assets is the accumulated depreciation. Having this number can help you understand how much you’re truly getting in deductions.
What is bonus depreciation?

Bonus depreciation was introduced as a tax incentive to help small businesses. It allows you to deduct a larger percentage of the original price of certain assets instead of over the life of the equipment.

About the Author

Christopher Murray

Christopher Murray

Personal Finance Expert

Christopher Murray is a professional personal finance and sustainability writer and editor who enjoys writing about everything from budgeting and saving to unique investing options like SRI and cryptocurrency.

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