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Anonymous
Not applicable

Deducting the Purchase of a Computer

I purchased a computer for my business in 2018, and launched the business in 2019. Given that this is the first year of operation can I deduct the cost of the computer in this year and if so how, given that the expense was incurred in 2018?

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Accepted Solutions
soultax09
Level 5

Deducting the Purchase of a Computer

you can deduct the computer in 2019 because that was the year it was placed in service....first year of business use in 2019 means you can use regular depreciation, bonus depreciation, or sec. 179 if there is enough taxable income.

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Anonymous
Not applicable

Deducting the Purchase of a Computer

Thank you @soultax09 after some additional research I learned that I can indeed deduct the full cost of the computer the first year it is put in service. It looks like I have two options--section 179 as you mention above *or* the De Minimus Safe Harbor rule as the cost of the computer is under $2,500. I can also do this with certain software purchases which is helpful. 

TurboTax Home and Business hasn't finished shaping up the Depreciation and Amortization schedule for 2019 but once it's done it looks like I will be able to take care of it in that section using either rule. 

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3 Replies
soultax09
Level 5

Deducting the Purchase of a Computer

you can deduct the computer in 2019 because that was the year it was placed in service....first year of business use in 2019 means you can use regular depreciation, bonus depreciation, or sec. 179 if there is enough taxable income.

View solution in original post

Anonymous
Not applicable

Deducting the Purchase of a Computer

Thank you @soultax09 after some additional research I learned that I can indeed deduct the full cost of the computer the first year it is put in service. It looks like I have two options--section 179 as you mention above *or* the De Minimus Safe Harbor rule as the cost of the computer is under $2,500. I can also do this with certain software purchases which is helpful. 

TurboTax Home and Business hasn't finished shaping up the Depreciation and Amortization schedule for 2019 but once it's done it looks like I will be able to take care of it in that section using either rule. 

View solution in original post

Anonymous
Not applicable

Deducting the Purchase of a Computer

for some taxpayers bonus is better than 179.       179 is limited to business income, so if you have a loss the deduction is carried over to the next year.  bonus is not limited by business income.     in addition should business use of of a "179" asset drop below 50% , unless the item would have been fully depreciated using its MACRS life,  the 179 deduction must be recaptured.        

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