Skip to main content
L
l12
April 14, 2022
Solved

Hi. How do I add a financed (12 monthly payments ) laptop as a depreciable asset? Thanks so much.

  • April 14, 2022
  • 2 replies
  • 0 views
Original commenter did not share additional details
Best answer by Rainflurry

@l12 

 

You can take a Section 179 deduction (100% depreciation) for the laptop in the year it is placed into service - see Part II, line 13 of Schedule C.  If you don't take it in the year it is placed into service, you will have to depreciate it over 5 years ($600/yr).  

 

I'm not super familiar with QBSE but I don't believe that you can accurately enter a transaction like this in QBSE.  The proper way to record the purchase and payments would be to create a journal entry by debiting a fixed asset account for the laptop and crediting a loan payable liability.  Then, when $300 is added to your Apple Card, debit the loan payable, credit the Apple Card liability account.  Then you can pay the card balance.

 

To book the Section 179 depreciation, debit Section 179 Depreciation expense account and credit accumulated depreciation.  

 

At this point you have everything recorded properly - the laptop has been recorded as a fixed asset and fully depreciated.  The amount owed on the laptop is booked as a liability and you will create a monthly journal entry to move the $300 from the loan to your Apple Card and make the payment.  The loan balance will reduce by $300 each month until it is paid off.  

2 replies

L
l12Author
April 14, 2022

For example, I purchased a macbook pro with an Apple Card ( which it doesnt look like quickbooks supports ).  But I pay it from my business checking account.  So ive changed those payments from my checking to expenses instead of just transfers.  But theyre still separate payments/purchases.  How will that work later since its a depreciable asset but the payments been separated into 12 months spread between 2021 and 2022 that Im still paying?  

 

Was I supposed to just manually input the full amount as one item bought in 2021 even though payments have been split up into 12 months spanning 2021 and 2022?

 

Apple Card also does not put the entire balance of your financed item on your card.  For example instead of putting $3000 on the card and having you pay $300 of that a month, the balance starts at $0 and gets $300 added to it every month.

 

Thanks so much.

RenjolynC
RenjolynC
April 14, 2022

Thanks for visiting the Community space, l12.

 

I'll give a brief overview about the depreciation asset in for QuickBooks Self-Employed.

 

At this time, tracking a depreciation asset is unavailable in QuickBooks Self-Employed. As a workaround, you'll want to keep a record of the basic information, like the purchase price and length of time you've owned the item. To learn more on what assets are supported, you can read the Assets section in this article: Schedule C and expense categories in QuickBooks Self-Employed.

 

At the end of the tax year, your tax pro or TurboTax can help you set up the depreciation schedule (or claim a Section 179 deduction). If you're not affiliated with an accountant, you can visit our Intuit Find-A-ProAdvisor site to find certified professionals near you.

 

For more details about tracking depreciation from TurboTax, categorizing and manually adding transactions in your Self-Employed account, please check out these links: 

 

Please let me know if you have further questions on this matter or need help with other concerns. I'm always available to help. Have a good day ahead.

    L
    l12Author
    April 14, 2022

    Thanks for your quick reply.  I do pay for TurboTax so I guess I will handle depreciation there.  However, how do I add the asset if I did not pay for the full product price up front and am paying monthly installments on it instead?  The monthly finance payments for the one laptop span 2021 and continue into 2022.  Do I just keep the entries separated one per month?  Thanks.

    Terms & ConditionsAccessibility statement