As a new business, should I enter a new computer under both Startup Costs AND Business Assets, or would that be a double-entry?

[IreneS · Accepted solution]

No -- That would be "double-dipping."

You could enter the computer as an asset and take depreciation over a number of years, or if the cost is less than $2,500, you can take it as an expense (but not a startup expense).

You can deduct up to $5,000 of startup costs as a current business expense.  The remainder is amortized over 180 months.

Start-up costs include:

• Survey of potential markets
• Advertising the opening of the business
• Consulting or other professional fees paid in connection with starting the business.
• Wages to employees being trained for the new business
• Analysis of possible facilities, labor force, supplies, etc.
• Travel and related expenses to secure distributors, suppliers and customers.

[destadenzel]

Thank you! To follow, my next question is, what would the benefit be of classifying my computer under $2,000 as an expense vs. an asset?

[destadenzel]

Also, if I purchased the computer prior to 2017, should I enter what I purchased it for or the current value?

[IreneS]

When could you use the deduction more to offset income?  If you have a large amount of income in 2017 you might want to take the entire amount as an expense.  If you'd rather have a portion of the deduction to offset income for the next 5 years, then treat the computer as an asset.
Enter the current value.

[destadenzel]

Thank you for the response! Since I am just starting out my photography business I hardly had any income and my equipment like my computer and camera cost more than what I earned. Since I don't have any net income, would you suggest I classify them as assets?

[SweetieJean]

Business start-up costs are generally claimed in the tax year the business is "open for business".  So that may be 2018, not 2017.