NetAsset - Tax Year-End Playbook
Overview
Year-end tax processes can result in missed steps without a structured approach. The guide below serves as a baseline for verifying tax-related activities and supports year-end tax reporting.
Disclaimer
This playbook is intended as a general guide. Not all steps may apply, and additional company-specific processes may be required to complete your year-end tax close. NetAsset provides suggested calculations—always validate with your tax advisors.
Year End Playbook
Step 1: Set Up Tax Year(s)
Tax Years act like your accounting periods but follow IRS rules, which change yearly (e.g., Section 168 percentages and 179 limits). Create one Tax Year per alternate schedule (Federal, State, etc.). Refer to the NetAsset - Tax Engine: Manage Tax Years guide for detailed instructions.
- Example: You have "Federal" and "Non-Conforming State" Alternate Schedules. For 2025 you will need to make a 'Federal 2025' Tax Year and a 'State 2025' Tax Year record. This is because different alternate schedules follow different rules (in this example your State Section 168/179 deduction limitation may be different than your Federal Section 168/179 deduction limitation).
Step 2: Apply Tax Rules to Assets
Apply rules per Taxpayer per Tax Year. This populates depreciation methods, lives, conventions, and Section 168/179 based on asset type and tax classification. Refer to the NetAsset - Tax Engine: Apply Tax Rules guide for detailed instructions.
- Example: if you had three Taxpayers (see drop down) and three Tax Years (see drop down), you will need to "Apply Tax Rules" nine times.
Tip: The Overwrite Depreciation Method checkbox should generally be checked to ensure all assets are re-evaluated using the correct depreciation method, overriding any manual or previously assigned methods. This prevents assets from being excluded from tax calculations and ensures conventions like mid-quarter are applied correctly. Best practice is to apply tax rules with this box checked, then make manual adjustments afterward, ideally at year-end.
Step 3: Customize Section 179 Deduction (Optional)
If electing to not use all of the Section 179 deduction, have any limitations, an income loss, or want to customize how the Section 179 is applied, then fill out the Section 179 worksheet. Refer to the NetAsset - Tax Engine: 179 Worksheet guide for detailed instructions. Once this worksheet has completed running, you will need to "Regenerate Schedules" in mass for tax schedules (Generate Alternate Schedules for Assets in Mass).
The Section 168 deduction (Bonus Depreciation) is applied after Section 179 to all of your assets. If you want Section 168 to be delegated by a segment then you need to do a csv upload after you do Step 3: Customize Section 179 Deduction.
Step 4: Validate Data with Registers and Reports
Cross-check and pull depreciation data via the Tax Register report in your report list.
Tax Register:
- Navigation: NetAsset > Reports > Subledger Reports > Tax Register.
- Common filters: Tax year/period, alternate schedule (Federal/State), subsidiary, asset type/status.
- Purpose/use: Validate tax basis, depreciation, Section 168/179.
If book and tax years differ, see NetAsset - Book Period differs from Tax Period guide.
Step 5: Generate Tax Forms
Navigate back to the Tax Year page(s), click Generate Tax Reports. Select a Tax Payer grouping and click Generate Reports. Repeat this process for each Tax Year.
This will produce:
- Form 4562 (Depreciation)
- Form 4797 (Disposals)
Disclaimer: This is software to assist your tax team, not a replacement for direct filing. Consult with tax professionals to confirm this information.
Considerations
- Begin process after all assets have been added for the year (often this means starting the process at the beginning of the following tax year)