Laptop write off for my online business

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@Bsch4477 wrote:

If you use the computer in your business more than 50% of the time, you can deduct the entire cost under a provision of the tax law called "Section 179."

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I don't believe this is correct.  Even though section 179 is allowed, you still have to allocate the business percentage.  @Anonymous_ ?

@talli1999 

There are two key principals.  In general, equipment purchased for a business that has an expected life of more than 1 year must be depreciated–that is, the cost is deducted over the expected life of the item.  That applies to tools, equipment, vehicles, and most other property including computers.

Second, if you have property that is used for both business and personal purposes, you must allocate the cost between the business and personal use.  In other words, if you use the computer 80% for business, you can deduct or depreciate 80% of the cost as a business expense.  If audited, you should have some kind of written documentation to show the IRS about how you determined the correct percentage.

Now, after taking those two principles into account, there are a couple of different ways that you might be allowed to deduct the entire cost of an item in the first year you used it in business instead of depreciating it over time.  One of those methods is called section 179 depreciation (as mentioned above).  There is also a "safe harbor" that allows certain items to be expensed instead of depreciated.   If you enter the item in Turbotax as an asset (property with a life of more than 1 year), Turbotax should tell you what your options are regarding expenses and depreciation. 

Not part of your question, but you can also deduct a percentage of your monthly internet service as a business expense, provided you have some reasonable method for determining the percentage of business use.