Should You Enter Depreciation from the Trial Balance in Drake?
No. Enter the assets on screen 4562 and let Drake compute the deduction and Form 4562 from them. Importing or typing the client book depreciation figure as well deducts the same expense twice. The difference between book and tax depreciation belongs on Schedule M-1.
- Data entry
- Screen 4562, Depreciation Detail
- One asset per screen
| Trial balance account | Drake Tax screen and field | Lands on |
|---|---|---|
| Depreciation expense, per books | Do not enter as a deduction | Schedule M-1 book to tax difference |
| Fixed assets | Screen 4562, Depreciation Detail | Form 4562, page 1, and Schedule L line 10a |
| Accumulated depreciation | Computed from screen 4562 entries | Schedule L line 10b |
| Beginning accumulated depreciation | From the prior year return or depreciation schedule | Schedule L line 10b, beginning column |
| Asset sold or scrapped | Screen 4562, mark as sold. Never delete the asset | Form 4797 and Schedule L |
| Section 179 | Screen 4562 on the asset | Form 4562 part I |
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Try it freeShould You Enter Depreciation from the Trial Balance in Drake? on a trial balance
| Acct # | Account | Debit | Credit |
|---|---|---|---|
| 1000 | Cash | 42,800.00 | |
| 1200 | Accounts receivable | 68,500.00 | |
| 1300 | Inventory | 55,000.00 | |
| 1500 | Equipment | 145,000.00 | |
| 1510 | Accumulated depreciation | 47,500.00 | |
| 2000 | Accounts payable | 28,400.00 | |
| 2100 | Accrued expenses | 9,200.00 | |
| 2400 | Notes payable | 92,000.00 | |
| 2450 | Due to shareholder | 15,000.00 | |
| 3000 | Common stock | 10,000.00 | |
| 3900 | Retained earnings | 86,300.00 | |
| 3950 | Shareholder distributions | 52,000.00 | |
| 4000 | Gross receipts | 612,000.00 | |
| 5000 | Cost of goods sold | 318,000.00 | |
| 6000 | Salaries and wages | 88,000.00 | |
| 6050 | Officer compensation | 72,000.00 | |
| 6300 | Depreciation expense (the account this page is about) | 21,500.00 | |
| 6900 | Other operating expenses | 37,600.00 | |
| Total | 900,400.00 | 900,400.00 |
Example journal entries
| Account | Debit | Credit |
|---|---|---|
| Depreciation expense | 21,500.00 | |
| Accumulated depreciation | 21,500.00 |
One expense, two sources, double deduction
Drake computes depreciation from the asset detail on screen 4562. The client's trial balance also has a depreciation figure, computed by their bookkeeping software on its own assumptions.
Use both and the same expense is deducted twice. Nothing errors, both figures look plausible, and taxable income is understated by the whole book amount.
The assets are the input
Screen 4562 holds cost, date placed in service, method, life and any section 179 or bonus election, one asset per screen. From that, Drake produces the current year deduction, Form 4562, and the fixed asset figures on the balance sheet.
Which means Schedule L's fixed asset lines are downstream of the asset module rather than of the trial balance. Entering equipment or accumulated depreciation by hand on screen L fights the asset detail instead of correcting it.
Beginning accumulated depreciation still has to come from somewhere
The current year trial balance shows this year's expense, not the accumulated total at the start of the year. That figure comes from the prior year return or the depreciation schedule, and it is the most commonly omitted number on a first year engagement.
Disposals: mark them sold, never delete
This is specific and it matters in Drake. An asset deleted from screen 4562 rather than being indicated as sold is one of Drake's own listed causes of an out of balance balance sheet.
Deleting removes the cost and the accumulated depreciation together with no disposal recorded, so both Schedule L lines move and the gain or loss never reaches Form 4797.
Expect a book to tax difference
The books might use straight line over a life somebody picked. The return uses MACRS, section 179 and bonus depreciation. They will not agree, and the difference belongs on Schedule M-1 rather than being forced into agreement in either direction.
Tax return treatment
| Form | Line |
|---|---|
| Form 1120S | Page 1 line 14 from Form 4562, with the difference on Schedule M-1 |
| Form 1065 | Page 1 line 16a from Form 4562 |
| Form 1120 | Page 1 line 20 from Form 4562 |
Common questions
Should I import depreciation from the trial balance into Drake?
No. Enter the assets on screen 4562 and let Drake compute the deduction and Form 4562. Importing the book figure as a deduction as well deducts the same expense twice, with no error or diagnostic to warn you.
Where does Schedule L accumulated depreciation come from in Drake?
From the asset entries on screen 4562 for the current year. The beginning column has to come from the prior year return or the depreciation schedule, because it does not appear on the current year trial balance.
What happens if I delete an asset from screen 4562?
The cost and accumulated depreciation both disappear with no disposal recorded, which moves both Schedule L fixed asset lines and leaves the gain or loss off Form 4797. Drake lists this as a cause of an out of balance balance sheet. Mark the asset sold instead.
Do book and tax depreciation have to match?
No, and they rarely do. The books use a chosen life and method; the return uses MACRS with section 179 and bonus depreciation. The difference is a Schedule M-1 adjustment, not something to reconcile away.
Related answers
Go deeper
This page is the short answer. These articles work through the same ground in detail.
Last reviewed October 18, 2026.