Do you have a depreciation errors that needs correction?
We have some good news on this error: First, you don’t have to pay the IRS user fees (which can vary from around $2,000 to $10,000), because your depreciation change is going to qualify as an automatic change that is not subject to user fees.
Second, because you failed to claim your correct depreciation in prior years, you are going to have what’s called a negative adjustment (negative for the government, but positive for you) equal to the total amount of your missed depreciation. This means you will take all the missed depreciation in one lump sum in the tax year when you make your automatic accounting change.
Third, we can do some planning as to the year you make the automatic change so that you realize the best possible tax benefits from your missed depreciation.
To make this change for you, we need to complete an eight-page IRS Form and a one-to-two-page adjustment worksheet attachment, in which we calculate the dollar adjustment and answer some questions for the IRS about the depreciation adjustment.
We then attach one copy of the Form, along with the worksheet, to your tax return and create a duplicate copy for you to file with another office of the IRS. We’ll make sure our instructions to you are crystal clear.
Let’s spend a few minutes brainstorming how this missed depreciation can turn into your good fortune. We can do this on the telephone or meet in person.
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Spencer Accounting Group, LLC does not provide investment, tax, legal, or retirement advice or recommendations in these blogs. The information presented here is not specific to any individual's personal circumstances.
Keana Spencer is an Accountant, Entrepreneur, and Educator to her clients, with a strong passion. Keana has over 10 years of experience and through her practice, she is a source of knowledge and strategies to her clients.