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Office vs. De Minimis business expense

I have a small business and make the De Minimis safe harbor election for expenses less than $2500.

 

I purchased what I would describe as cheap (less than $200) office equipment (e.g., audio cables, chair pad, computer stand). Do I still mark these as other expenses under the de minimis safe harbor or can these lighter equipment simply be deducted without citing the de minimis safe harbor under "Office Expense" on Schedule C?

 

Secondly, can I lump several pieces of equipment from multiple purchases under a single de minimis header on Schedule C (e.g., "Computer equipment" to describe a laptop and wireless mouse purchased in 2023 on separate orders) or must each de minimis line item on Part V on Schedule C be tied to a separate purchase invoice?

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1 Best answer

Accepted Solutions

Office vs. De Minimis business expense


@Michael16 wrote:

I purchased what I would describe as cheap (less than $200)....


Tools.

Unless the uniform capitalization rules apply, amounts spent for tools used in your business are deductible expenses if the tools have a life expectancy of less than 1 year or they cost $200 or less per item or invoice.

 

https://www.irs.gov/publications/p535#en_US_2022_publink1000208620

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4 Replies
Carl
Level 15

Office vs. De Minimis business expense

They don't have to be tied to separate invoices. They do have to be tied to separate line items on a single invoice.

Office vs. De Minimis business expense

Per invoice or item:

 

See https://www.irs.gov/businesses/small-businesses-self-employed/tangible-property-final-regulations#Ad...

 

A de minimis safe harbor election

Note: Effective for taxable years beginning on or after Jan. 1, 2016, the Internal Revenue Service in Notice 2015-82PDF increased the de minimis safe harbor threshold from $500 to $2500 per invoice or item for taxpayers without applicable financial statements.

Office vs. De Minimis business expense


@Michael16 wrote:

I purchased what I would describe as cheap (less than $200)....


Tools.

Unless the uniform capitalization rules apply, amounts spent for tools used in your business are deductible expenses if the tools have a life expectancy of less than 1 year or they cost $200 or less per item or invoice.

 

https://www.irs.gov/publications/p535#en_US_2022_publink1000208620

Office vs. De Minimis business expense

As Tagteam pointed out, anything $200 or less is automatically Materials and Supplies, so just deduct it under any appropriate category.

 

The De Minimis election means you treat the items $2500 and less as Materials and Supplies.  There is no need to separately account for the items.  As long as you make the election, you can put those items under any appropriate category (such as "supplies" or whatever else applies).

 

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