Using an accelerated depreciation method for tax purposes and the straight-line depreciation method for financial accounting purposes allows more depreciation to be taken on the tax return early in the asset's life than is taken on the income statement.

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This approach allows a company to defer taxes by accelerating depreciation on the tax return, leading to higher deductions in the early years of an asset's life, while using the straight-line method for financial reporting spreads the depreciation evenly over the asset's useful life.

Using an Accelerated Depreciation Method for Tax Purposes and the Straight-Line