What to Know About Fixed Assets—Consultant Edition
As a consultant, you might not think of your business as "asset-heavy"—but if you use a computer, own a camera, or purchased equipment or furniture for your work, you do have fixed assets. And understanding how to handle them correctly in your books can save you money and protect you during tax season.
Here’s a simple guide to what you need to know.
What Is a Fixed Asset?
A fixed asset is a physical item your business purchases for long-term use—typically something that will last more than a year. Think:
Laptops or desktop computers
Cameras, microphones, lighting (for content creators or consultants who present online)
Office furniture like desks or chairs
Specialized tools or equipment
Even a company vehicle
These items are not considered regular business expenses. Instead, they’re capitalized, which means the cost is spread out (or depreciated) over the item’s useful life.
When Should You Capitalize vs. Expense?
Here’s a quick rule of thumb:
If it costs more than $2,500, and will last more than a year, it's usually a fixed asset. Anything under that threshold can often be expensed immediately.
(That $2,500 rule comes from the IRS de minimis safe harbor election, but talk to your accountant to see if a different threshold applies to your business.)
Why Fixed Assets Matter to Consultants
Fixed assets show up in your financials differently than normal expenses:
They don’t reduce your taxable income all at once like office supplies or software subscriptions.
They require tracking for depreciation, which your accountant uses to calculate how much value to deduct each year.
When sold or disposed of, they can trigger a gain or loss on your books.
They should be listed separately on your Balance Sheet, not the Profit and Loss.
Properly categorizing fixed assets keeps your books clean, ensures accurate tax deductions, and helps if you're ever audited.
How to Handle Fixed Assets in QuickBooks Online
Track the purchase:
Enter the full cost as a Fixed Asset category (not a regular expense).
Include taxes, shipping, and setup fees—anything that gets the asset ready for use.
Record depreciation:
Work with your accountant to set a depreciation schedule.
They’ll help you (or your bookkeeper) enter journal entries each year to reflect the asset’s reduced value over time.
Keep documentation:
Save the original receipt, warranty info, and purchase justification.
If you’re ever audited, you’ll want these on file.
Key Takeaways
Fixed assets = long-term business tools (usually $2,500+)
Track them as assets, not expenses
Depreciate over time with help from your accountant
Keep receipts and asset details on file
Need help cleaning up your chart of accounts or making sure fixed assets are recorded properly? I help consultants like you stay confident and compliant in your bookkeeping.
Book a free discovery call today.