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Hey all, I could really use some help in learning about depreciation.

I am quite familiar with using the methods of depreciation such as straight line, double declining, etc. However, I am not sure what to do next. For example, a new printer for a business is a capital expenditure that must be capitalized and depreciated over the relevant class life. Are depreciation deductions above the line deductions or below the line?

In summary, I get how to calculate depreciation, but how does depreciation affect my calculations of either AGI or taxable income?

Please help, and thanks in advance.

I believe they are used to calc AGI

UAX09 wrote:Hey all, I could really use some help in learning about depreciation.

I am quite familiar with using the methods of depreciation such as straight line, double declining, etc. However, I am not sure what to do next. For example, a new printer for a business is a capital expenditure that must be capitalized and depreciated over the relevant class life. Are depreciation deductions above the line deductions or below the line?

In summary, I get how to calculate depreciation, but how does depreciation affect my calculations of either AGI or taxable income?

Please help, and thanks in advance.

Depn expense is usually capitalized above pretax income. You can figure this out just by looking for the "depreciation" line item on any income statement. If you're asking for your own taxes (and not an acctg class), I advise you to get a real accountant or pony up for TurboTax...if you're doing your taxes by hand, you're doing it wrong.