I have an LLC taxed as a disregarded entity, and I have two questions regarding how to finalize my books at the end of the year.
1. I use the "Actual Expenses" method to deduct my vehicle expenses. Per my mileage log, I will deduct 60% of my vehicle expenses as business related.
At the end of the year, should I do a journal entry to reclassify the "Personal" portion (40%) of the expenses as an Owner's Draw like I do with other expenses?
2. Each year I buy about $2K - $3K in computer equipment. I take Section 179 Depreciation on the full amount each year.
So I have the equipment on my balance sheet as "Computer Equipment Asset". How do I record this on my books? Do I Debit "Section 179 Expense" and Credit "Accumulated Depreciation"?
Also, I know according to GAAP you're not supposed to match the depreciation on your books to the tax return, but in my case I get rid of (donate) most of my computer equipment after a year or so. So is it ok to just match it? (will it be a headache if I ever need financial statements in the future?)
Lastly, when I rid of an Asset (donate / dispose - not sell) do I just Debit A/D and Credit Expense?
Thanks!!!
1. I use the "Actual Expenses" method to deduct my vehicle expenses. Per my mileage log, I will deduct 60% of my vehicle expenses as business related.
At the end of the year, should I do a journal entry to reclassify the "Personal" portion (40%) of the expenses as an Owner's Draw like I do with other expenses?
2. Each year I buy about $2K - $3K in computer equipment. I take Section 179 Depreciation on the full amount each year.
So I have the equipment on my balance sheet as "Computer Equipment Asset". How do I record this on my books? Do I Debit "Section 179 Expense" and Credit "Accumulated Depreciation"?
Also, I know according to GAAP you're not supposed to match the depreciation on your books to the tax return, but in my case I get rid of (donate) most of my computer equipment after a year or so. So is it ok to just match it? (will it be a headache if I ever need financial statements in the future?)
Lastly, when I rid of an Asset (donate / dispose - not sell) do I just Debit A/D and Credit Expense?
Thanks!!!