Section 179 Deductions for Asset Items

The United States government allows US companies to use a section 179 deduction to accelerate the depreciation for assets.

The government sets a yearly limit, which you can find in IRS Publication 946.

You can use the section 179 deduction for any additional books that you set up for an asset item. The deduction cannot be applied for your GL book.

Setup

To use section 179 deductions for asset items, complete the following section 179 setup steps in Settings > Accounting > Asset Management:

• On the Additional Books tab, select the Section 179 check box for any additional books for which you want to use the section 179 deduction.
• On the Section 179 tab, enter a row in the grid for a tax year, and enter the section 179 limit for the tax year. This limited amount can be applied to one or more asset items for an additional book for the tax year.

Entering Section 179 Deduction Amounts to Asset Items

You apply a section 179 deduction to an asset item's depreciation basis, which reduces the depreciation basis. Deltek uses the depreciation basis to calculate the asset item's depreciation.

Enter the section 179 deduction amount for an asset item in the Less Section 179 Deductions field on the Additional Books tab in the Equipment hub.

The section 179 deduction amount that you enter for an asset item cannot exceed the acquisition cost of the asset item. For an additional book for a specific tax year, you can enter a section 179 deduction amount for one or more asset items until you reach the limit set by the government. Deltek prevents you from entering section 179 amounts that exceed the limit that you entered in Settings > Accounting > Asset Management.

Example: If the section 179 deduction limit for the tax year is $25,000 for additional book A, you can use the complete section 179 deduction of $25,000 on only one asset item whose acquisition cost is $25,000 or more. Or, you can apply portions of the $25,000 deduction to a number of different asset items. After you have applied $25,000 worth of section 179 deductions to one or more asset items, Deltek prevents you from entering any more deduction amounts for the tax year for additional book A.

Viewing Section 179 Deduction Information

You can view section 179 deduction information for asset items on the Additional Books tab in the Equipment hub and in the following areas of the Asset Management application:

• Section 179 Review: View all asset items that have had a section 179 deduction applied to them for a specific tax year for a specific additional book. You also see the in service date for the asset items and the section deduction 179 limit for the tax year that was entered on the Section 179 tab in Settings > Accounting > Asset Management. This allows you to see the government-set limit for the year for additional books and how much of this amount you have applied to asset items.
• Asset Review: The Net Section 179/179A field on the Summary tab displays the section 179 deduction amount that is entered for a selected asset item in the Less Section 179 Deductions field on the Additional Books tab in the Equipment hub.

Turning Off the Section 179 Deduction for an Additional Book

If you clear the Section 179 check box for an additional book after you have applied section 179 deductions to asset items and depreciation has been processed for these asset items, the next time that you process depreciation, the accumulated depreciation will be recalculated without the section 179 deduction.