Do you typically enter your tax return adjustments into your bookkeeping/accounting records, because the presentation of the Schedule L "Balance Sheet per Books" will depend on whether or not your normal accounting method reflects tax adjustments or not - TurboTax doesn't default to adjusting the balance sheet for tax depreciation (as the IRS wants this to be reflecting of book accounting, not tax accounting).
If you do not keep your accounting records on tax basis, you'll want Schedule M-1 (directly underneath the balance sheet on page 6 page 5) to reflect the depreciation.
To update Line 6a Deductions included on Schedule K, not charged against book income this year (itemize): Depreciation,
- Select Forms
- Select
Form 1065 p5-6Form 1120S p3-5 - Scroll to Schedule M-1 Smart Worksheet
- Scroll to Line 6a, enter your tax Sec. 179 amount into the box.
This will create a book-tax difference so your ending capital per Schedule L is not out-of-balance by amounts that are not included in your book accounting.
If you do keep your accounting records on tax basis,
- In Step-by-step,
- Federal Taxes
- Balance Sheet
- Quick Entry
- Less: accumulated depreciation
- In the End of Year column, enter the total accumulated depreciation, that adds in the Sec. 179 amount
This method presumes you are also making this entry in your business' Quickbooks (or other software). If you are on cash basis, you made need to make an adjusting entry to move this purchase from expenses into accumulated deprecation; you may also consider opting out of filing Schedule L altogether if you are under the threshold.
More guidance:
TurboTax - What's a Section 179 deduction?
Edit: For Schedule L on an 1120S, you'll follow the same navigational steps as above, but you'll reference back to these IRS instructions.
[Edited 02/11/26|4:35pm PST] @ihikaru1