How do I track depreciation in Quicken so that I can transfer the information to TurboTax?
TurboTax handles specific depreciation information that needs to be reported and tracked from year to year. Quicken can usually track long-term depreciation related to business or personal net worth using asset or liability accounts (however, please be aware that this information cannot be exported to TurboTax.) For more information regarding asset and liability accounts, refer to Quicken Help:
- From the Quicken Help menu, choose Contents.
- Click the Index tab, and then type liability accounts.
- Click the Display button. (You can also select an entry from the list of liability-related subtopics, and then click Display.)
Refer to the following scenarios for the appropriate way to track tax-related depreciation information in Quicken so that you can then enter the information into TurboTax.
Note: Do not assign depreciable expenses to Schedule C: Other business expenses in the Tax Line Item Assignment window.
Section 179 Depreciation: Suppose you paid $576 for a piece of equipment for your home-based business. Under IRS Section 179, the entire amount of this expense can be deducted from the gross receipts of the business in the year it is purchased.
When you enter the $576 expenditure in Quicken, assign a category to it. One option is to assign a category for general business expenses, run a category report at tax time showing all business expenses, review the report for depreciable expenses, and then manually enter these expenses into TurboTax. Or, create a category specifically for depreciable expenses, run the category report, and then enter the information on Form 4562 (Section 179 Limitation) in TurboTax.
Long-Term Depreciation: Suppose you paid $5300 to replace the roof on a rental unit that you own. As a major repair that increases the value of the property, this expense cannot be charged against repairs, but it can be depreciated over the 27.5-year period that the IRS allows for residential rental property. Enter the entire $5300 amount into TurboTax one time, and for each succeeding tax year, TurboTax will calculate the appropriate amount of allowable depreciable deduction for that year.
When you enter the $5300 expenditure in Quicken, assign a category to it - either a general expense category for the property or a category specifically created for depreciable expenses. Either way, you can run a Quicken report at tax time to obtain the necessary information, which you then enter on Form 4562 (Depreciation Report - All Assets) in TurboTax.