Overview

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Tax depreciation is one of the largest book-to-tax differences in corporate returns—and getting it wrong can mean filing errors and rework. This course teaches you to apply U.S. tax depreciation rules accurately in a corporate tax context. You'll work through a realistic fixed asset scenario for a mid-sized company, building skills that transfer directly to compliance work. Starting with the fundamentals of why book and tax depreciation differ, you'll learn to classify assets under MACRS, apply Section 179 and bonus depreciation in the correct order, and calculate first-year deductions step by step. The course also covers Schedule M-1 reconciliation—how to determine where depreciation differences belong and whether they create deferred tax liabilities or assets. You'll practice identifying common errors and using a structured review process to catch mistakes before filing. Who this is for: Entry-level tax analysts and accounting professionals who work with fixed assets in corporate tax compliance. Basic familiarity with financial accounting concepts is helpful but not required. Note: This course uses a synthetic scenario with illustrative thresholds. Always verify current-year figures using IRS Publication 946 before preparing actual returns.

Syllabus

Book vs Tax Depreciation Fundamentals
- This module introduces the core difference between GAAP book depreciation and MACRS tax depreciation, and explains why the same asset can produce different expense amounts for financial statements and tax returns. You'll learn to identify when a depreciation timing difference occurs, understand how it flows to Schedule M-1, and recognize whether it points toward a deferred tax liability or asset. These foundational concepts appear in nearly every corporate return and set the stage for the classification and calculation work ahead.
MACRS Asset Classes, Recovery Periods, and Conventions
- This module covers how to classify fixed assets under MACRS by determining the correct recovery period, depreciation method, and convention. You'll work through common asset categories—including computers, vehicles, furniture, machinery, qualified improvement property, and buildings—and learn to avoid frequent classification mistakes. Accurate classification is the starting point for every tax depreciation calculation, and errors here cascade through the entire return.
Applying Section 179, Bonus Depreciation, and First-Year Deductions
- This module walks through the first-year depreciation stack: Section 179 first, bonus depreciation second, and MACRS on the remaining basis. You'll apply the required order to a realistic fixed asset listing, check Section 179 limits, use the current-year bonus rate, and calculate total first-year deductions in an Excel workpaper. Getting the order and limits right directly affects the tax deduction your client or company can claim.
Reconciling Depreciation on Schedule M-1
- This module focuses on comparing book and tax depreciation, calculating the difference, and placing the adjustment on the correct side of Schedule M-1. You'll build a reconciliation workpaper, determine whether each difference is temporary or permanent, and connect the results to deferred tax logic. This is where your depreciation work becomes visible on the return—and where mapping errors can cause filing mistakes.
Building Analyst Judgment and Review Discipline
- This module ties together classification, calculation, and reconciliation into a repeatable analyst workflow. You'll practice moving from asset facts to a defensible tax conclusion, apply a structured review checklist, and reflect on how to catch common errors before filing. Strong review habits distinguish reliable analysts from those who simply follow steps without understanding why.