Safe Harbor Election form found after filed

HelloAgain · ‎March 13, 2022

We have a very tiny ebay business. No complicated accounting. Took deduction for $800 computer bought last year and put-into-service this year. Thought sec 179 not avail because not same year as bought. Selected special depreciation 100% instead of 5 yr depreciation. Kosher, right? Until we reviewed forms filed and found Section 1.263 De Minimis Safe Harbor Election was sent to IRS. Why weren't we told this? We never checked this or saw a screen question for it!!!! Don't think we want it. Read it changes our accounting to complicated and once claimed can't be revoked it. What does this mean? Is this a TT bug?

We're in a panic we'll have to turn around and file an amended return.

Thanks!!!

MinhT1 · ‎March 13, 2022

You do not need to amend your tax return.

The de minimis safe harbor election is an annual election. The election can be made or not made each tax year. The election is not a change in method of accounting. Similarly, if you stop making the election, it is not a change in method of accounting either.

Please read this IRS document for more information.

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HelloAgain · ‎March 14, 2022

Thanks! Good to know it's for this year only. Great link, too! As non-accountants, we understand only 1/2 of IRS verbiage. Did see the de minimis safe harbor election applies to all deductions, like supplies. Now worried listing our pencils, paper clips, etc under supplies on Sch C was correct. It said < $2,500 didn't need a formal AFS, accounting method. But later it said filing the de minimis safe harbor doesn't mean you've filed form 3115 notice of change in accounting method to safe harbor.

☹️ It's all so messy. We would've chosen 5-yr depreciation over this. That is if the safe harbor election was sent because we took the100% first year special depreciation. Does anyone know who to call at Turbo Tax to find out why they did this? What happened to transparency? It was one sheet, 1/4 pg, we found after we filed. Experts online didn't agree (shocker!) and we didn't find the link you sent to IRS. So thanks!