Depreciation: definition, example, and why it matters
A $30k truck isn't expensed all in year one — it's depreciated over 5–7 years. Reduces taxable income each year. Section 179 lets US small businesses expense the full cost immediately for qualifying assets.
Short definition. Spreading the cost of a long-lived asset over its useful life for tax purposes.
Category. Depreciation is a accounting term used by service businesses when billing customers.
How Glo Invoice handles it. Glo Invoice builds depreciation into the invoice itself, so you don't track it on paper or in a spreadsheet.
Frequently asked questions
What does depreciation mean?
A $30k truck isn't expensed all in year one — it's depreciated over 5–7 years. Reduces taxable income each year. Section 179 lets US small businesses expense the full cost immediately for qualifying assets.
Related terms
Tax deduction — A business expense that reduces taxable income.
Balance sheet — A snapshot of what a business owns, owes, and is worth at a point in time.
