NetAsset - Tax Engine: Manage Tax Years

Overview

Once the tax engine has been set up in NetAsset, a tax year needs to be created so it can then be applied to the assets. It's recommended to do this step at the end of the year because tax law updates may not be released until later in the year. 

Create Tax Years 

Navigate to NetAsset > NetAsset Setup > Manage Tax Years  

This is where tax years will be managed from. To create a new tax year, select New NetAsset Tax Year. 

On the next page, there are only three fields required to be filled in. The other fields will be auto-populated. 

  1. Name of the tax year
  2. Alternate Schedule for the tax year to run on 
  3. Start Date of the tax year. 

For more information on setting up Alternate Schedules, see the NetAsset Alternate Schedule Setup and Schedule Generation article. If a company has a fiscal tax year, the Q2, Q3, Q4, and End Dates will adjust automatically to match the NetSuite period settings.   

The other tax fields will auto-populate based on these inputs based on the most up-to-date tax laws and limitations. See details on the tax fields below:

  • Section 179 Amount - Section 179 is an immediate expense deduction that business owners can take for depreciable assets purchased during the tax year, instead of the asset being capitalized over a period of time. The amount in this field is the maximum deduction amount allowed for the specified tax year. Here, that deduction is a maximum of $1,160,000.
  • Section 179 Limitation - The Section 179 Limitation is the limitation placed on total asset purchases for that tax year. Here, assets purchased cannot exceed $2,890,000.
  • Section 168 Percentage - This is also known as Bonus Depreciation. This allows businesses to immediately deduct a large percentage of the purchase price of eligible assets rather than spread the depreciation over the life of the asset. There is no amount limitation on Section 168. The percentage in this field is the max percentage of the asset that can be deducted in the first year of purchase. In this case, the maximum percentage immediately deductible is 80% of the asset purchase price.

When the tax engine is enabled, similar fields to the above will show up on each asset record in the Tax Information section.

Tax Rules

The Tax Rules section shows the out-of-the-box tax rules being used in the tax engine as per Federal Tax Laws. A custom tax rule can be added if needed. Multiple Tax Classifications can be selected for each rule.   

Note, that Luxury Auto limitations are supported by the system. For this rule to take place, an asset will need to be marked as a "Luxury Auto" on the asset record.


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