How to enter Depreciation into QuickBooks

Did you just get your depreciation schedule from your tax professional?
Are you ready to learn how to enter depreciation into QuickBooks?
In this video, I will share what depreciation is, and how to enter it into QuickBooks both for Desktop and Online users. 😊
➡️ Depreciation
In accounting terms, depreciation is defined as the reduction of recorded cost of a fixed asset in a systematic manner until the value of the asset becomes zero or negligible.
➡️ Assets
An example of fixed assets are buildings, furniture, office equipment, machinery, vehicles, etc.
Land is the only exception which cannot be depreciated as the value of land appreciates with time.
➡️ Rules…
Depreciation allows a portion of the cost of a fixed asset to the revenue generated by the fixed asset.
This is mandatory under the matching principle as revenues are recorded with their associated expenses in the accounting period when the asset is in use.
This helps in getting a complete picture of the revenue generation transaction.
➡️ GAAP:​
In the United States, accountants must adhere to Generally Accepted Accounting Principles (GAAP) in calculating and reporting depreciation on financial statements.
GAAP is a set of rules that includes the details, complexities, and legalities of business and corporate accounting.
GAAP guidelines highlight several separate allowable methods of depreciation that accounting professionals may use.
➡️ IRS
The IRS has information about the depreciation and lifespan of assets.
www.irs.gov/publications/p946
➡️ Three main inputs are required to calculate depreciations:
1. Useful life - this is the time period over which the organization considers the fixed asset to be productive. Beyond its useful life, the fixed asset is no longer cost effective to continue the operation of the asset.
2. Salvage value - Post the useful life of the fixed asset, the company may consider selling it at a reduced amount. This is known as the salvage value of the asset.
3. The cost of the asset - this includes taxes, shipping, and preparation/setup expenses.
➡️ How the Different Methods of Depreciation Work
➡️ There are three methods for depreciation:
Straight Line
Declining Balance
Sum-of-the-Years’ Digits
➡️ What vehicles qualify for the full section 179 deduction?
SUVs, trucks, vans, and other vehicles that don’t qualify as passenger vehicles aren’t subject to the IRS limits. You can take a full depreciation deduction each year. Using bonus depreciation and Section 179, you may be able to deduct all or most of the cost of such a vehicle in a single year.
***If you'd like the outlined steps for this, click here to get those details on my blog: canduskampfer.com/how-to-ente...
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I’d love to hear if this inspired an “aha moment” and if you are ready to start entering in your depreciation.
Timestamps: (QuickBooks Tutorial)
0:00 - Intro
0:37 - Take notes
0:44 - What is Depreciation?
1:14 - Assets
1:48 - Rules (Depreciation)
2:14 - GAAP
2:26 - IRS Website
2:39 - Three main inputs are required to calculate depreciation
3:01 - Three methods for depreciation
3:15 - Straight line method
4:07 - What vehicles qualify for the full section 179 deduction?
4:21 - What is Accumulated Depreciation?
4:51 - Capitalized Asset/Depreciation/Accumulated Depreciation
5:13 - Start with adding your Assets
5:25 - Add Accounts to enter Depreciation in QuickBoooks
6:04 - Setup Depreciation Accounts (Desktop)
7:58 - Sample COA (Online)
11:32 - Journal Entry (Desktop)
12:47 - Checking Reports (Desktop)
14:39 - Setup Depreciation Accounts (Online)
17:24 - Journal Entry (Online)
19:07 - Checking Reports (Online)
21:10 - Final Thoughts
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• How to enter Depreciat...

[@beverlywilliams2510]

I do not and I know I should. That is why I am watching this. So glad found your you tube channel. Thank you.

[@CandusKampfer]

I'm so glad you found us! If you would like to learn more about QuickBooks, we will be hosting special workshops in January. You can add your contact information here: canduskampfer.com/training Have a great day! Ireland Team Candus P.S. We’d love to connect with you! Find us on ↓ Instagram: instagram.com/candus.kampfer Facebook: facebook.com/CandusKampfer

[@yair1956]

As you mentioned, and one of the big advantages of QuickBooks is working around the Journal Entry, which is a bit intermediating for most unprofessional users, & can get you in trouble if you don't have any idea or experience with Ledgers, so it can be very helpful if you can post the process of by passing the Journal Entry by using the Chart of account only.

[@suewahl7955]

Thank you so much! That was incredibly helpful.

[@CandusKampfer]

Hi Sue, I'm so glad this helped you! If you're looking for more QuickBooks training, I'd recommend joining us on our next workshop. You can save your seat here: canduskampfer.com/workshop Have a great day! Ireland Team Candus P.S. We’d love to connect with you! Find us on ↓ Instagram: instagram.com/candus.kampfer Facebook: facebook.com/CandusKampfer

[@sarahs7096]

This helped me so much!! Everything I read online completely neglected to mention the depreciation expense account, which was causing my asset to be out of balance. Thank you!

[@CandusKampfer]

We're so glad it helped you. Have an amazing day! Ednalyn ~ Team Candus P.S. We’d love to connect with you! Find us on ↓ Instagram: instagram.com/candus.kampfer Facebook: facebook.com/CandusKampfer TikTok: www.tiktok.com/@canduskampfer Pinterest: pinterest.com/canduskampfer/

[@micahbelliston6052]

Same for me!

[@dr.olivianews9959]

This was excellent. Thank you so much!

[@CandusKampfer]

Hi Olivia, I'm so glad this helped you! If you're looking for more QuickBooks training, I'd recommend joining us on our next workshop. You can save your seat here: canduskampfer.com/workshop Have a great day! Ireland Team Candus P.S. We’d love to connect with you! Find us on ↓ Instagram: instagram.com/candus.kampfer Facebook: facebook.com/CandusKampfer TikTok: www.tiktok.com/@canduskampfer

[@lindajohnson4096]

Great presentation. Thank you!

[@CandusKampfer]

Hi Linda, I'm glad you enjoyed it! If you would like to learn more about QuickBooks, we are hosting special workshops. You can add your contact information here: canduskampfer.com/training Have a great day! Ireland Team Candus P.S. We’d love to connect with you! Find us on ↓ Instagram: instagram.com/candus.kampfer Facebook: facebook.com/CandusKampfer TikTok: www.tiktok.com/@canduskampfer

[@manilajayasinghe3864]

Very helpful Thank you ❤️

[@CandusKampfer]

Hi Manila, I'm so glad it helped you. Have an amazing day! McKenzie ~ Team Candus P.S. We’d love to connect with you find us on ↓ Instagram: instagram.com/candus.kampfer Facebook: facebook.com/CandusKampfer

[@rawtravel6417]

Love your videos

[@CandusKampfer]

Thank you!

[@angelasalvania8269]

Great Presentation!

[@CandusKampfer]

Hi Angela, Thank you so much! I'm glad you enjoyed it! If you enjoyed this tip and would like to get them straight to your inbox in the future you can join our weekly Tips & Tricks: canduskampfer.com/weeklytips Have a great day! Ireland Team Candus P.S. We’d love to connect with you! Find us on ↓ Instagram: instagram.com/candus.kampfer Facebook: facebook.com/CandusKampfer

[@frankayala3950]

Amazing knowledge 😮 🎉thank you .

[@CandusKampfer]

Glad it helped you. Have an amazing day! Ednalyn ~ Team Candus P.S. We’d love to connect with you! Find us on ↓ Instagram: instagram.com/candus.kampfer Facebook: facebook.com/CandusKampfer TikTok: www.tiktok.com/@canduskampfer Pinterest: pinterest.com/canduskampfer/

[@smallbiztaxlady]

Thank you!

[@CandusKampfer]

You're very welcome Trudy! ~Kindra/Team Candus 🤩

[@kulwinderthind9347]

Your videos are very simple to understand clearly about topics. Could you please also make a video about how to track gst and file it online.

[@CandusKampfer]

Thank you for your request. I’m sorry at this time we don’t cover gst.

[@MrChanroth007]

Thanks for sharing

[@CandusKampfer]

No problem Keo! Thanks for watching. Have an amazing day! Kindra ~ Team Candus P.S. We’d love to connect with you! Find us on ↓ Instagram: instagram.com/candus.kampfer Facebook: facebook.com/CandusKampfer TikTok: www.tiktok.com/@canduskampfer

[@carringtonlovejr2325]

Thank you ma'am!!

[@CandusKampfer]

Hi, Thanks for reaching out. I'm so glad you enjoyed our video 🥰 If you’d like to learn more about how to optimize QuickBooks for your business, I recommend checking out our Confidence with QuickBooks program. To learn more you can attend our Customizing QuickBooks workshop. Save your seat here: CandusKampfer.com/workshop Have a great day, Samantha, Team Candus

[@srinivasjaisairam1989]

Very useful Post,,, Thanks Madam

[@CandusKampfer]

You're Welcome 😊 Have an amazing day, Ednalyn ~ Team Candus P.S. We’d love to connect with you find us at ↓ Instagram: instagram.com/candus.kampfer Facebook: facebook.com/CandusKampfer

[@edwinngugi5352]

Than you!

[@CandusKampfer]

Hi, Thanks for reaching out. I'm glad you enjoyed this video! If you’d like to learn more about how to optimize QuickBooks for your business, I recommend checking out our Confidence with QuickBooks program. To learn more you can attend our Customizing QuickBooks workshop. Save your seat here: CandusKampfer.com/workshop Have a great day, Samantha, Team Candus

[@accountonmystillc3036]

Hi! Thank you so much for this! This was very helpful! How would you suggest listing over 20 FAs in QBO if coming from an previous CPA with no bookkeeping and only the Tax Asset Detail from Desktop? They have disposed of over half the list and added others.

[@CandusKampfer]

thank you for watching the video Account on Mysti LLC 😊 I will add your question to the list Candus uses to create new QuickBooks tips each month. In order for you to get your specific questions answered, from Candus is to register for and attend her workshop. Here is the link to register to attend: canduskampfer.com/workshop Have a great day! Elaine Team Candus P.S. We’d love to connect with you! Find us on ↓ Instagram: instagram.com/candus.kampfer Facebook: facebook.com/CandusKampfer TikTok: www.tiktok.com/@canduskampfer

[@christinevalenti8080]

You're so much better than my accountant

[@christinevalenti8080]

Really I love you the most amount. My accountant did my taxes last year and this year I'm doing turbotax and couldn't figure out why it didn't match and you helped me figure it out. He should have told me to adjust for depreciation in QB! Although he would have mansplained it so I'd rather hear it from you :)

[@CandusKampfer]

Hi Christine, Thanks for reaching out. I'm so happy you've found Candus's teaching style helpful! 🥰 If you’d like to learn more about how to optimize QuickBooks for your business, I recommend checking out our Confidence with QuickBooks program. To learn more you can attend our Customizing QuickBooks workshop. Save your seat here: CandusKampfer.com/workshop Have a great day, Samantha, Team Candus

[@stjepanvidovic7193]

good video. I have a question. For companies that are remote only and have an international contractors team, and which don't have any physical goods, how to do amortization/depreciation? I suppose that they probably have intangible assets, such as know-how. How to add it in that case? How to even valuate that know-how properly?

[@CandusKampfer]

Hi Stjepan, I'll make sure your question is added to Candus' list of future Tips & Tricks ideas. If you'd like to make sure you get our weekly tips, you can join here: canduskampfer.com/weeklytips Have an amazing day🙂 Elaine Team Candus P.S. We’d love to connect with you! Find us on ↓ Instagram: instagram.com/candus.kampfer Facebook: facebook.com/CandusKampfer TikTok: www.tiktok.com/@canduskampfer

[@jacquelinecasper9991]

Hi. Thanks for this video! It was really helpful. There was one part that confused me. You mentioned that the Depreciation shows up as an expense on the Balance Sheet, but I thought the Depreciation Expense is on the Income Statement and the Accumulated Depreciation shows up on the Balance Sheet. Can you please clarify? I am new and still learning. Thanks. :)

[@CandusKampfer]

Hello Jacqueline, Expenses will show on the Profit and Loss Assets (Accumulated Depreciation) will show up on the Balance Sheet. Have a great day! Candus

[@skydancer15]

Jacueline, depreciation shows on the Balance Sheet because that's where assets show up and Accumulated Depreciation as a contra-asset account.

[@mohammadmusabeh2910]

Hi, is there a way where i can define the asset life and have the system generate the Dep/Acc Dep monthly instead of manual entries? Thank you.

[@CandusKampfer]

Hello! Thank you for watching our videos 😊 I will add your question to the list Candus uses to create new QuickBooks tips each month. If you haven't already joined our weekly QB Tips & Tricks, click here to join and we'll send you our tips straight to your inbox: canduskampfer.com/weeklytips Have a great day! Kindra ~ Team Candus P.S. We’d love to connect with you! Find us on ↓ Instagram: instagram.com/candus.kampfer Facebook: facebook.com/CandusKampfer TikTok: www.tiktok.com/@canduskampfer

[@grizzygriz7957]

What is the name or form number that the accountant prepares that list all your depreciated assets? And does it show previous balances from prior year(s)? I want to check for accuracy. This video presentation was straight forward. Thank you

[@CandusKampfer]

Thank you for watching our videos 😊 I will add your question to the list Candus uses to create new QuickBooks tips each month. If you haven't already joined our weekly QB Tips & Tricks, click here to join and we'll send you our tips straight to your inbox: canduskampfer.com/weeklytips Have a great day! Ednalyn ~ Team Candus P.S. We’d love to connect with you! Find us on ↓ Instagram: instagram.com/candus.kampfer Facebook: facebook.com/CandusKampfer TikTok: www.tiktok.com/@canduskampfer Pinterest: pinterest.com/canduskampfer/

[@marketbuy]

Form 4562

[@debblouin]

I prefer to book depreciation monthly so I have a better income statement review by the 10th.

[@TalinsRealZ]

Hello! I am never given any worksheet from my CPA showing my journal entries I need to make on depreciation for any fixed asset. Is there a way to find them on the tax returns or figure out what they should be? I have fixed assets that are from prior years that I'd like to remove from my books that I have sold especially in 2021.

[@CandusKampfer]

Hi, The tax return should have the fixed depreciation schedule include. If you haven't already joined our weekly QB Tips & Tricks, click here to join and we'll send you our tips straight to your inbox: canduskampfer.com/weeklytips Have an amazing day! Sam ~ Team Candus P.S. We’d love to connect with you! Find us on ↓ Instagram: instagram.com/candus.kampfer Facebook: facebook.com/CandusKampfer

[@staceywilks69]

Thank you - how do you enter the "Original Cost"?

[@CandusKampfer]

Hi Stacey, I'm glad you found the video helpful. If you’re looking for more specific training, I would recommend checking out our special workshop 🥳 You can click here to save your seat: canduskampfer.com/workshop Have a great day! Ireland Team Candus P.S. We’d love to connect with you! Find us on ↓ Instagram: instagram.com/candus.kampfer Facebook: facebook.com/CandusKampfer TikTok: www.tiktok.com/@canduskampfer

[@israelalvarado9720]

question, when i want to create an depreciation account as a sub account on an asset, i don't get the same window that you get, i get asset>fixed assets. and everything else is grayed out. it will not let me create it under a sub account.

[@CandusKampfer]

Thank you for watching our videos 😊 Hi Israel, I will add your question to the list Candus uses to create new QuickBooks tips each month. If you haven't already joined our weekly QB Tips & Tricks, click here to join and we'll send you our tips straight to your inbox: canduskampfer.com/weeklytips Have a great day! Kindra ~ Team Candus P.S. We’d love to connect with you! Find us on ↓ Instagram: instagram.com/candus.kampfer Facebook: facebook.com/CandusKampfer TikTok: www.tiktok.com/@canduskampfer

[@AZdomingo]

If I have 5 vehicles should I do the depreciation in a sub account also or is it necessary

[@CandusKampfer]

Tami, This is totally up to how you want to see it on your reports.

[@monicagranados4177]

Thanks! Please, I don't understand what is the use of creating the items in "Fixed Asset Item List"... Is there no way to "Call" them in the registry? is it just to have the information?

[@CandusKampfer]

Hi Monica, I'll make sure your question is added to Candus' list of future Tips & Tricks ideas. If you'd like to make sure you get our weekly tips, you can join here: canduskampfer.com/weeklytips Have an amazing day🙂 Elaine Team Candus P.S. We’d love to connect with you! Find us on ↓ Instagram: instagram.com/candus.kampfer Facebook: facebook.com/CandusKampfer TikTok: www.tiktok.com/@canduskampfer

[@monicagranados4177]

@@CandusKampfer thank you!

[@marketbuy]

You started showing us how to set up a Fixed Account. You then immediately confused us by switching around by setting up Accumulated Depreciation Account. Was there a video on how to set up Fixed Account? I looked in your library but did not see one.

[@thomwalker2888]

How to set up a loan from your company to another entity?

[@CandusKampfer]

Hi Thom, I'll make sure your question is added to Candus' list of future Tips & Tricks ideas. If you'd like to make sure you get our weekly tips, you can join here: canduskampfer.com/weeklytips Have an amazing day🙂 Elaine Team Candus P.S. We’d love to connect with you! Find us on ↓ Instagram: instagram.com/candus.kampfer Facebook: facebook.com/CandusKampfer TikTok: www.tiktok.com/@canduskampfer

[@sophiestorontolife6566]

Your English is too fast😂 thank you!

[@CandusKampfer]

There is a little wheel in the right bottom corner (settings) where you can slow down the video if you'd like. 😊 Kindra/Team Candus

[@sophiestorontolife6566]

@@CandusKampfer Thank you so much! Do you have video on quickBooks for manufacturing company?

[@davidriley1482]

Yes, she speaks very fast but clearly. Sadly, in the US, English is spoken very fast due to the influence of Spanish speakers. English sounds extraordinarily BEAUTIFUL when it is spoken just the way the Brits intended.

[@shibli.theone]

Please remove the other pre-created accounts; in this case, pre-created "Depreciation" & "Accu. Depreciation". It will be helpful for better understanding.

[@CandusKampfer]

Thank you for your feedback. 😊