Where do I enter a self-employment/business expense for equipment?

Forum|Forum|4 years ago
March 14, 2022
2 replies
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I get to "Business Expenses", and see a long list (Advertising, Commissions, Communication expenses, etc..), but no place for equipment.

The next page is "Report Long-Term Care Insurance"

Then "Business Expenses not yet reported", which only includes:
- Postage
- Books and magazines purchased for your business
- Credit card processing fees
- Membership fees for professional associations
- Website maintenance fees
- Internet provider fees
- Bank charges
- Startup costs up to $5000; the remainder must be deducted over multiple years

Best answer by AnnetteB6

The section you are looking for is under the All Other Expenses category. Keep going past the long-term care insurance questions to the page titled, Enter Business Expenses Not Yet Reported. This is the section for Miscellaneous expenses.

The examples shown on that page are only examples. This is really the place to report anything that doesn't seem to fit anywhere else.

Enter your own description for the expense and the amount.

@blesna1

DMarkM1

Small tools would fall into the "Miscellaneous Expense" category. Something bigger/more expensive would be added as an asset to be capitalized.

When entering as an asset, the item(s) may qualify for section 179 deduction or bonus depreciation in the first year. As you go through the asset entries be sure to look at the "Learn More" hyperlinks to help you decide on taking the expense in one year versus capitalized over several years.

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blesna1Author

Thanks @DMarkM1. Where would the "Miscellaneous Expense" section be? I don't see that category in any of the pages I mentioned.

Just to clarify, these would all be equipment expenses under the $2500 threshold, taken in the given tax year (ie: electronics and other hardware), and not depreciated.

GeorgeM777

To follow-up on the very good comments from @DMarkM1, there is no category entitled Miscellaneous Expense. Given the nature of your expenses, it appears that some of them may be added to the Supplies category. When you sign back into your return, and if you are in the Income & Expense section (TurboTax online), enter "business expenses" in the search bar (no need to use the quotations). Then use the jump-to link to take you to the section where you can enter your business expenses.

In the description for Supplies, TurboTax indicates that such category includes computer accessories. In the Asset category, you will see questions relating to assets purchased for less than $2,500. A "yes" response will result in the option to deduct such items as expenses.

@blesna1

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VolvoGirl

Employee

Under Business Expenses do you have Other Common Business Expenses? Misc goes there. I put my small tools there, not under Supplies.

blesna1Author

@GeorgeM777 - Thanks for your reply. I entered this info when I created the post, but it's not showing above: I'm using TurboTax Premier for desktop. So the instructions you mentions don't necessarily map to the right form for me.

Once I do get to the Business Expenses though (after flipping through several pages), I have 4 categories:

Cars, trucks and other vehicle expenses
Assets and depreciation - this is where I originally thought it would be. It says "Examples of assets include: Equipment, Computers and other office machines, Office furniture". But this never works for me. Perhaps there is a bug in the desktop app? See below for more details..
All other expenses - the list I mentioned in my original post above. Note this does have a Supplies category, but it's reserved for "incidental items that cost $200 or less or last less than a year" (ie: pens, pencils, paper, ink, etc.)
Home office expenses - this requires a "Qualifying business office" which means it's dedicated and used exclusively only for conducting your business (doesn't work for me because I typically use non-dedicated rooms for doing video production work, ie: bedroom, kitchen, etc.

Here's what happens after I select "Update" for Assets and depreciation:
- Select "Yes" to "Did you buy or own any assets, other than vehicles, in this business?",
- Select "Yes" to "Did you buy any items for any business, rental property and/or farm than cost $2500 or less in 2021"
- The next page is "Let's see if you can deduct these items as expenses", "You can do this if you have a consistent process for you record expenses and assets" and "The cost must be $2500 or less". It then asks 2 questions: "Do both apply to you?", "Do you want to take this annual election?", I answer "Yes" to both then select "Continue".
- The next page is "Now, let's review each item you bought", and asks me to confirm that "Every item I bought cost $2500 or less", then I select "Continue".
- Then I'm returned to the main Business Expenses page where I started 😕😕