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To many people who own a small business or take a home office deduction, the process of depreciating equipment doesn't make a whole lot of sense. Depreciation isn't rocket science, but the IRS does have a specific set of rules governing how to depreciate equipment. Follow the rules and businesses shouldn't have a problem should they ever get audited; however, bending or ignoring the rules can cause trouble for business owners who choose to do so. This article will explain the correct method for calculating straight-line depreciation, which most businesses use. Steps: 1. Look at the company check register or go through receipts to find out how much the equipment cost. 2. Decide how long the equipment will be used. To properly depreciate equipment, the business owner must have some idea of how long the business plans to use the equipment. 3. Divide the cost of the equipment by the number of years the business owner expects the equipment to last to calculate straight-line depreciation. In some instances, an accountant will take more of the depreciation during the first few years the equipment is used. This will help reduce a large tax bill initially, but it could result in higher taxes later in the life of the equipment. originated by: WRM, BoldStepFixer Source: www.wikihow.com