Capitalize vs expense
Whether a purchase becomes a fixed asset depreciated over years (capitalize) or a cost of this period (expense). Price and useful life decide.
In Solo Superstars
The app does not decide for you. Small tools and software subscriptions are expenses; a $2,400 desk or a vehicle belongs on the Fixed assets page. Many businesses use a $2,500 threshold, matching the IRS de minimis safe harbor.
Example
A $180 keyboard: expense to 6220. A $2,400 desk: fixed asset in 1500, depreciated.
Codes shown are the defaults a new workspace starts with. Yours may be renamed or renumbered — check Accounting › Chart of accounts. See the full default chart.
Also called
- capitalization threshold
Related
- Fixed asset — Equipment, vehicles, furniture or property you will use for more than a year. Recorded at cost and depreciated, not expensed.
- Depreciation — Spreading the cost of a long-lived asset over the years you use it, instead of expensing it all at once.
- Operating expense — The cost of running the business: rent, software, meals, insurance, payroll. The 6000–7999 accounts.