All posts

Depreciation of Assets: Complete 2026 Guide for Small Business

How the depreciation of assets works, who qualifies, how much you can deduct, and how to document it properly.

April 24, 2026 2 min readby TinSuite Team
tax deductions depreciation write-offs

The depreciation of assets is one of the most valuable — and most misunderstood — deductions available to small business owners. Here's exactly how to use it in 2026.

What it is

Deduct the cost of equipment, vehicles, and property over their useful life.

The numbers

MACRS tables by asset class. 5-year (computers), 7-year (office furniture), 27.5-year (residential rental), 39-year (commercial).

Who qualifies

To claim this deduction, you must:

1. Operate a business (sole prop, LLC, S-Corp, C-Corp, or partnership)

2. Be the correct entity type for this deduction

3. Document properly — the IRS requires contemporaneous records

How to claim it

Sole proprietors

Report on Schedule C of your personal 1040.

Multi-member LLCs / partnerships

Report at the entity level on Form 1065, flows to partners via K-1.

S-Corporations

Report on Form 1120-S, flows to shareholders via K-1.

C-Corporations

Deduct directly on Form 1120.

Documentation requirements

The IRS expects you to keep contemporaneous records — meaning you track it as it happens, not reconstruct at tax time.

Required:

  • Dates and amounts
  • Business purpose (one-sentence description)
  • Receipts for $75 or more
  • For vehicle/mileage: starting/ending odometer, route, purpose
  • For travel: dates, locations, attendees, business discussed

Recommended: keep digital copies in your accounting software. Photograph paper receipts and attach to the transaction.

Common mistakes

1. Missing documentation — a receipt you lose isn't a deduction

2. Mixing personal and business — bright line: business from business account, personal from personal

3. Assuming "if I spent it, it's deductible" — only ordinary and necessary business expenses qualify

4. Not keeping records for 7 years — IRS audit window

5. Rounding up — the IRS notices nice round numbers

How TinSuite handles this

TinSuite is designed to maximize deductions:

  • Receipt OCR — photograph any receipt, data is auto-extracted and filed
  • Mileage tracker — GPS-based auto-tracking with business-purpose tagging
  • Category engine — transactions auto-categorize by deduction type
  • Audit-ready records — every deduction has a receipt + description + date
  • Year-end report — deduction summary ready for you or your CPA

Start your free trial → · See all tax deductions we cover.

Related