Computer return crossed over into next year

[bambid4]

I am Self Employed.  I purchased and paid for a computer for my business in December 2024.  I decided it wasn't the right computer, so I returned it and purchased another one (also in December 2024). However, I did not receive the return credit until January 2025 and I was charged a 15% restocking fee which was deducted from the refund.  For the first computer I paid $2,400 in December 2024 and received a refund of $2,040 in January 2025.  Is any of this deductible on my schedule C?  Can I at least deduct the restocking fee of $360 in 2024 since that is when I paid it?

[Vanessa A]

Yes, the second computer that you kept if it cost less than $2,500 would be a deductible expense on your return if it is used for business.

If it costs more than $2,500 it would be entered as an asset on your Schedule C, however, you would be able to take a Section 179 deduction for the purchase and still claim the full purchase price for 2024. As you walk through the steps in the asset section, you will be asked if you want to fully expense the computer. 

Yes, the restocking fee you can list as a miscellaneous expense.  When you do this just add in the description that it was a restocking fee for computer that was returned and the amount that you were charged. 

If the computer is not used 100% for business, then you must prorate the cost between business and personal use.  Example, if the computer is used for business only 50% of the time and you paid $2,400, you would only be able to deduct $1,200.