What are the tax implications of depreciation errors?

What are the tax implications of depreciation errors?

Depreciation errors can lead to incorrect tax deductions, potentially resulting in underpayment or overpayment of taxes.

How can I correct these errors on my tax return?

You can amend your tax return by filing Form 1040-X and providing the correct depreciation calculations.

Will correcting these errors trigger an audit?

While correcting errors may raise flags, it’s better to correct them than to leave inaccuracies on your return.

What records do I need to keep for depreciation?

You should keep purchase invoices, asset appraisals, and any documentation related to the depreciation method used.