It depends. You may enter the cost of the phone as an expense rather than an asset, since it costs less than $2500. The personal asset tax can be listed as an expense under taxes. Here is how you enter your phone, assuming you are already working in Turbo Tax.
- Log into your Turbo Tax return and do the following:
- Select federal>income and expenses>Self-Employment>show more
- Self-employment income and expenses>start or revisit
- Now I assume you have already entered information regarding your business. if you have, there should be a summary screen showing the name of your business. If so, select the review button.
- The next few screens will show your profile and income information. After you reach the business income section, press continue.
- After the program decides what deductions may be right for you, scroll past these screens and you should reach a screen that says What kind of expenses did you have for XXX? Here you will select assets
- Also to select taxes, you need to scroll to the bottom of the page and select less common expenses, here you will select taxes. Select all other expenses related to your work while you are here.
Now regarding assets.
- After checking assets, taxes and licenses, and other expenses related to your work, press continue on the bottom of the page. The next screen will list all of expenses you chosen so let's begin assets.
- Answer the question in the first screen until you get to a screen that asks Did you buy any items for any business, rental property and/or farm that cost $2,500 or less in 2020? if you wish to expense your phone rather than depreciate it, you will say yes.
- Then the next screen will ask you questions like if you wish to use this election yearly, here you will say yes or no.
- Now, if you wish to expense this phone, you will need to go to the miscellaneous section of your return and enter this as I-phone De Minimus Safe Harbor election and then the amount Since you use this only 65% for business, you can only claim $455. ($700 X .65).
- Now if you wish to take the 179 deduction rather than expense the phone, you would say no to the questions in #2 above.
- You will enter the information that this was a phone and then it will ask you the purchase date, cost, and all other relevant information.
- The next screen will ask if you use this 100% for business, here will say no and you will enter the date you started using it and the percentage of time you used it for business.
- You will navigate over the next few screens until you come to a page that asks How Do You Want to Deduct this Item?
- Here is where you will select I'll deduct the full value of the item this year. (Take the Section 179 deduction) Note there are other options to take also.
- if you reported your information correctly, the amount of your 179 deduction is the same as your expense listed above based of of the 65% business use expense.
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