Entering depreciation for new clients in ProConnect Tax

For more depreciation resources, check out our Tax topics page for Schedule C where you'll find answers to the most commonly asked questions.

When you have a client with existing depreciation and you are entering for the first time into the program, follow these steps:

1. Go to Input Return ⮕ Deductions ⮕ Depreciation.
2. Enter pertinent information into the grid:
   • Description of Property
   • Form
   • Activity Name or Number
   • Date Placed in Service
   • Category
   • Cost or Basis
   • Method
3. On the right side of the row, click the blue Details button.
4. Under Regular Depreciation, in the Federal Depreciation section, fill out Prior Depreciation/Amortization and Prior Section 179.

For business returns (Partnership, S-Corporations, Corporations, and Exempt Organizations), you must go to the Balance Sheet screen and enter the amounts for Beginning: Buildings and Other Depreciable Assets and Beginning: Less Accumulated Depreciation for assets placed in service in a prior year.

ProConnect Tax will not transfer prior year assets of a first return by filling out the beginning balance. If the asset is placed in service in the current year, the program will include the amounts in Ending: Buildings and other depreciable assets and Ending: Less accumulated depreciation.

Assigning Custom Categories for Depreciable Assets

To assign assets to a custom category:

1. Go to Input Return ⮕ Deductions ⮕ Depreciation.
2. Select Details on an asset.
3. Enter the custom category in the Category [Override] field.
4. Repeat steps 1-3 for any additional assets you would like to include in the custom category.

The program will group assets on the Depreciation Schedules first by what form they are assigned to (e.g. Sch C, Sch E), and then by their category.

Different depreciation types

Section 179, part of the U.S. internal revenue code, allows business owners to take an immediate expense deduction when purchasing depreciable business equipment.

Bonus depreciation allows for businesses to reduce their taxable income by writing off a significant portion of the cost of eligible assets in their first year.

Special depreciation allowance is an extra allowance that you can take the first year a property (depreciated under the MACRS method) is placed in service. This additional allowance is automatically calculated unless you manually opt out of it.

For more info on these, see IRS Pub. 946

What's new for tax year 2025

The One Big Beautiful Bill brings many changes to Section 179 and Special Deprecation Allowance. Here are some of the key updates:

• Qualified production property placed in service after July 4, 2025, the construction of which began after January 19, 2025, may be eligible for a 100% special depreciation allowance.
• Section 179 deduction dollar limits have been increased, including the amount for SUV's.
• For certain qualified property placed in service before January 20, 2025, a phase-down of the special depreciation allowance is in place.
• Certain qualified property placed in service after January 19, 2025 may be eligible for 100% special depreciation allowance or you can elect to take 40%.
• Domestic research and experimental expenditures may be amortized over either a 60 month, or 10-year period. Different periods apply for foreign research.

For full details, review the 4562 instructions.

Instructions for entering this in ProConnect Tax are coming soon. For more information, see Applying the One Big Beautiful Bill changes to Depreciation in ProConnect Tax.

What's new in 2024

As of 2024, we've added the following functionalities to the depreciation page:

• Search (works on most fields)
• Filter by form
• Export to CSV
• Export all items