Printer Expense, Depreciation and Tax Deduction

[Roscolo]

So, I'm doing my taxes (U.S.) last minute as usual. Curious how some others, particularly sole proprietors, have dealt deducting a large purchase.

I bought a 44" z3100 last year. Can I deduct the full expense or is this something I should depreciate? Apparently since the asset is "new" to the business this year, TurboTax says I can deduct the full amount this year. Seems that may throw my numbers into a greater potential for an audit.

But I think they made the rule about depreciating things over 5 years without technology in mind.

How did some others handle this?

Thanks

[framah]

See... that's why we use accountants. They can answer question such as these.

You have the choice of either depreciating or deducting the whole thing. You are allowed somewhere around $100,000 (don't remember exactly) deduction on equipment in a year or so my accountant told me. This year I wanted all of my equipment deducted in this year as I need the reduce my numbers so I pay less  in taxes.

Call an accountant.

[Roscolo]

Yep. I don't really need an accountant for this. The accountants are in bed with the IRS anyway. I would like to deduct the entire expense this year as well, but that makes an audit much more likely. And sure, I can handle an audit, but the expense and time lost makes it about as worthwhile to just show some extra income that's not there to avoid the hassle.

Still waiting on that IRS overhaul / elimination all out politicians all talk about and do nothing!

Just wondering what other individual freelancers have done.

Thanks

[Ken Bennett]

I took the full deduction on gear for many years, and was never audited. My 2007 printer purchase was fully deducted on this year's return, too.

Where were you told that it would increase your chances of an audit?

[Dward]

I always take a Section 179 Expense on equipment, (which is a one-year depreciation).   No problem with the IRS---this sort of business expense is precisely what the 179 option is for.  Perfectly legit.

David V. Ward, Ph. D.
www.dvward.com

[tomm101]

Yep. I don't really need an accountant for this. The accountants are in bed with the IRS anyway. I would like to deduct the entire expense this year as well, but that makes an audit much more likely. And sure, I can handle an audit, but the expense and time lost makes it about as worthwhile to just show some extra income that's not there to avoid the hassle.

Still waiting on that IRS overhaul / elimination all out politicians all talk about and do nothing!

Just wondering what other individual freelancers have done.

Thanks
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Depends on the accountant, my second one was very helpful in the deduction section, my first was by the books AKA in bed with the IRS. After getting the tips from my accountant and paying him hansomely for them. Then I used Turbo Tax Premier with small business extension, that was until I got a paying job.

Tom

Tom

[Roscolo]

I took the full deduction on gear for many years, and was never audited. My 2007 printer purchase was fully deducted on this year's return, too.

Where were you told that it would increase your chances of an audit?
[a href=\"index.php?act=findpost&pid=189741\"][{POST_SNAPBACK}][/a]

Deducting the full amount would put me over into showing a loss. I also showed a slight loss last year.

Also, because of the rebate this year, I actually come out better, meaning I get a much higher tax rebate check if I do the 5 yr. depreciation, AND I show a small profit. So depreciation it is.

As far as audit, I'm just going by the TurboTax "audit risk" assessment. If I deduct the full cost of the printer it says my audit risk is "high," but when I depreciate it over 5 years, my audit risk is "low" I suppose for the reasons above.

Oh well, I guess it will come in handy being able to take the deduction over the next 4 years.

Without the tax rebates this year I may have done it differently, but rebate or refund it's all the same to me. It all spends the same.

[ternst]

Roscolo:

I'm just curious - if you already knew all the answers and were not going to pay any attention to what others said, why did you bother to ask in the first place?

[Roscolo]

Roscolo:

I'm just curious - if you already knew all the answers and were not going to pay any attention to what others said, why did you bother to ask in the first place?
[a href=\"index.php?act=findpost&pid=189897\"][{POST_SNAPBACK}][/a]

Oh...just to pique your curiosity!