Per Diem Rates from the U.S. General Services Administration
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Rates are set by fiscal year, effective October 1 each year. Find current rates in the continental United States ("CONUS Rates").
Important Points to Keep in Mind When Depreciating Property
Startup Businesses
MACRS Accelerated Depreciation:
Because accelerated depreciation provides higher deductions in the earlier years than straight-line depreciation, the tax savings will allow you to keep more cash in your business during the early growth years.
Straight Line Depreciation:
If you expect losses in the early years of your start-up, you may not be able to take advantage of the higher deductions produced by MACRS accelerated depreciation. Rather than wasting the higher deduction in the early years, consider using straight-line deprecation, which provides a lower, but even amount of depreciation each year.
Partial Business Use
When using equipment for both business and personal use, you must allocate depreciation to business use. For example, if you use you car for business and personal use, you calculate your business-use percentage by dividing your annual business miles traveled by your total annual miles traveled.
You Must Reduce Basis
You must reduce the basis of depreciable property by the amount of depreciation you actually claimed or the amount you would have been allowed to claim had you not claimed any depreciation. In other words, depreciation is deemed to be deducted whether or not you actually deduct it.
Regarding bonus depreciation, you are deemed to have claimed if even if you didn't and must reduce the basis of the property involved by the amount of bonus depreciation you could have claimed.
You're not required to claim bonus depreciation and have the option of electing out of using it. The election is made on a per-asset-class basis. For example, you can elect out of claiming bonus depreciation for five-year property while still using it for seven-year property. To make the election, attach a statement to your tax return indicating the property class for which you do not want to claim bonus depreciation.
Alternative Minimum Tax (AMT)
You may have to file Form 6251 if you use accelerated depreciation rather than straight-line depreciation. However, there is no depreciation adjustment for the AMT if:
- You use straight-line depreciation for regular tax purposes, or
- You use the 150% declining balance method under accelerated MACRS.