<klink type="cncpt">Tell me about depreciation</klink>
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<p>Most <glossary tNum="288843">fixed assets</glossary> lose value over time as they wear out or become obsolete. The IRS allows you a depreciation deduction over the life of an asset to account for this loss of value.</p>
<p>For example, let's say your business buys a copier with a useful life of five years for $13,030. If you report the entire cost of the copier in the year you buy it, the financial picture of your business might look worse than it should for that year, and better than it should for the next four years. Instead, the financial results of your business for all five years should reflect the shared burden of paying for the asset.</p>
<p>Consult your accountant to determine the depreciation method and period of time you should use to depreciate the asset. Depreciation for business accounting and for tax purposes may be quite different. Furthermore, depreciation for tax purposes is quite complex<mdash/>more reason to talk to your accountant.</p>
