Office equipment and business deductions

Forum|Forum|3 years ago
January 26, 2023
2 replies
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I purchased a number of smaller office items for my new small business in 2022. Examples include paper shredders, mounted wall clock, universal power supply, peripheral computer and desk equipment, etc. Each item costs less than $2500.

How should I categorize these purchases in TurboTax? Are they best listed as assets or expenses? I know there is an election option for assets and I'm wondering if these business purchases best fit there.

TurboTax Business Windows

MinhT1

You can expense these pieces of equipment if you make the de minimis safe harbor election.

They are then expensed as Miscellaneous expenses and described as Equipment with a unit cost below $2,500.

Please read this IRS document for more information.

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Michael16Author

If I take the simplified home office deduction, can I still expense these items as miscellaneous equipment or must I enter actual expense with the Office Expense Expert?

AmeliesUncle

If they are items in the office (desk, chair, etc.), you deduct that separately. If it is an improvement to the office, that is part of the office (which is already covered under the Simplified Method).

AmeliesUncle

Items $200 and less can be deducted.

If you QUALIFY for and MAKE the De Minimis election, that can increase the amount over $200 (but not over $2500).

Michael16Author

To clarify, these are deducted under business expenses and not business assets in TurboTax?

Michael16Author

Reading further on this topic, it seems I should enter these office expenses under line 27a ("Other expenses") of Schedule C. However, in order to attach a Section 1.263(a)-1(f) De Minimis Safe Harbor Election statement for tangible property, TurboTax users must "dummy" it in through the Business Assets section even though you enter the deductions in business expenses, not assets (TurboTax says explicitly not to enter items already entered as expenses).

It would be helpful in future TurboTax editions to be able to include the election statement without having to walk through the Business Assets section.