all right in this video I'm going to show you how
to depreciate your food truck equipment whether that's food cart food trailer or food truck
there's a way to do it that's efficient and pretty simple okay it's using the modified accelerated
cost recovery system in other words on form 4562 that's in this section right here part three line
19 for the year you're putting it in service okay so this is year one so as an example if you bought
something this year next year when you're filing your
taxes for 2024 this is what it's going to
look like you should definitely use a depreciation expense tracker it's a table like this and it
lays out everything you did so you don't forget otherwise you're going to have to relearn it
next year and it's just a waste of time okay so let's say you bought a a lower more affordable
food truck for 25,000 and all of the equipment in it my opinion this would be be a pretty good
price right in year one you'll be able to expense $5,000 and in year two
8,000 and so on how
do we get to this number that's because we're using the 200% DB as the depreciation method
in other words this is the double declining balance for convention we're choosing the half
year convention and for the useful life we're saying it's good for five years so how do I get
this number well if you were to divide $25,000 by 5 which is essentially 20% a year we're doubling
that number to 40% because we're using this double declining balance method so this would normally
be $10,000 right here but because it's year one we have to use this convention which is the
half year convention that's saying that you can only take half of the expense in the first
year that's how we get to this number so this video is specifically about year one so I'm
going to show you how to fill it out if this is the case for you so line 19 in this column
you're going to put the value of the equipment the number of recovery periods that'll be
five for the convention you'll put HY for
the method you'll put 200 DB which stands for
the 200% declining balance and so the amount in year one that you'll be able to deduct is
right here $5,000 all right if you have any questions about this let me know please hit the
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what always seem to be the complicated things
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