What it is
Book and tax depreciation rarely match. The difference shows up on Schedule M-1 each year and builds a temporary difference that gives a deferred tax balance.
The workbook takes book and tax depreciation by asset, with Section 179 and bonus shown separately, and computes book carrying amount, tax basis, the year’s difference, the cumulative temporary difference and deferred tax at your rate. The Summary tab shows the M-1 line that matches, the deferred tax expense and tie-outs.
When to use it
- Preparing the tax provision.
- Reconciling book income to taxable income.
- Reviewing deferred taxes before the audit.
What’s inside
- 40 asset rows with book, tax, 179 and bonus columns
- Book carrying amount, tax basis and cumulative difference
- Deferred tax at the input rate
- Summary with M-1 lines 5a and 8a, deferred expense and tie-outs
Standard cited
This template follows ASC 740 / IRC 168. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use.
Questions
Does this compute MACRS?
No. Take tax depreciation from your tax software or ledger. The fixed asset register in this library has MACRS.
Which rate is used for deferred tax?
You enter the blended rate expected to apply when the difference reverses.
What breaks the tie-out?
Disposals and basis differences at acquisition change the cumulative difference outside the year’s depreciation.
Related templates
- Fixed Asset Register with Book and MACRS Depreciation
- Deferred Tax Rollforward and Valuation Allowance Worksheet
- Income Tax Provision Workbook (ASC 740)
- Schedule M-1 Book-to-Tax Reconciliation Workbook (Excel)
Last updated 11/05/2026. All free templates.