Before Using the 168 Allowance Switch

What should I do before I use the 168 Allowance Switch?

Before you perform a 168 Allowance Switch, you should spend some time planning and creating your asset groups. Remember that you elect the 168 Allowance for entire classes of assets (3-year property, 5-year property, etc.). Your asset group could include multiple classes of property, as long as you include all of the qualifying assets for each class in the group. Also, ensure that any asset groups using the "Plus 168" depreciation methods include only assets that are eligible for the additional depreciation.

Note: The 168 Extra feature allows you to use a 168 Allowance % not valid for federal purposes for assets placed in service in years 2023 and later.

You may also want to reset depreciation on your assets to the placed-in-service date before you use this feature, especially if your assets contain beginning depreciation amounts. If you want to retain the information in the beginning depreciation fields, then reset depreciation to the Beginning Date instead.