How do I calculate computer depreciation?

Basic depreciation of the computer, which is how much money value the computer has lost over time, you can find out in two ways: a direct line method and a method of decreasing balance. The direct line method assumes the same amount of the computer decreases by the same amount every year, while the decreasing balance method loses greater value when the newer and less value is as aged. One of these methods can be used to calculate the computer value that is usually done for tax purposes. Take the original purchase price for the first year and multiply by 20%. Read this number from the purchase price and the resulting number is how much the computer is value after one year of use. For example, if a computer costs $ 1,000 USD (USD), Multilyiing is 20% $ 200. $ 1,000 - $ 200 = $ 800. The computer value after one year of use is then $ 800.

The first year percentage must be used to calculate the following years. Using an example of $ 1,000 by RO ROFor two, he calculated that for the first time, $ 800, and deducting another $ 200, a computer worth $ 600 will be $ 600 after the second year. The third year would result in a value of $ 400, the fourth year would be $ 200 and by the fifth year the computer completely depreciated zero value.

The method of decreasing balance to determine the computer depreciation is a bit more complicated. The first step is the same: start with the original value of the computer, but then multiply by 40%. For a computer $ 1,000 it's $ 400. Read the amount from the original price of the computer and give your computer a value of $ 600 after the first year. For second year, take the value of the previous year, in this case $ 600, times 40%, which is $ 240. Read $ 240 from $ 600, which gives a value of $ 360 after the second year.

In the US, it must be entitled to depreciation about the depreciation of the computer on the taxation of the computer, to use it for the enterprise enterprise or an activity that generates income, and must have a useful service life for more than one year. Form 4562 must be used when declaring depreciated items on federal DAny confession. More information about this procedure can be obtained from the Internal Revenue Service (IRS).