It seems like I'm always struggling over whether to put small expenses under "Supplies" or "Other Misc. Expenses." TurboTax's instructions say "Supply expenses are incidental items that cost $200 or less or last less than a year" - which to me makes it sound like supplies can be virtually anything (except inventory or items over $200). Thus are "supplies" really "all miscellaneous items under $200," and "other misc" is really "other misc over $200?"Note: I'm a sole proprietor, and do not have a separate office space.Some specific examples: where would each of these most appropriately go? chargers/AC adapters wires tools (< $200) cases/containers (i.e. for a laptop/phone) headphones (< $50 for use only while working) postage The official IRS instructions for this line says "...the cost of books, professional instruments, equipment, etc., if you normally use them within a year." Many of these smaller items I listed are not used completely within a year...but then, neither are many of TurboTax's examples (i.e. flash drives, calculators, storage and filing boxes) - which seems to contradict the IRS's instructions. I can't seem to find where the $200 threshold mentioned in TurboTax comes from.

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Solved

Supplies vs Other Misc Expenses?

Forum|Forum|7 years ago
June 5, 2019
1 reply
5 views

It seems like I'm always struggling over whether to put small expenses under "Supplies" or "Other Misc. Expenses." TurboTax's instructions say "Supply expenses are incidental items that cost $200 or less or last less than a year" - which to me makes it sound like supplies can be virtually anything (except inventory or items over $200). Thus are "supplies" really "all miscellaneous items under $200," and "other misc" is really "other misc over $200?"

Note: I'm a sole proprietor, and do not have a separate office space.

Some specific examples: where would each of these most appropriately go?

chargers/AC adapters
wires
tools (< $200)
cases/containers (i.e. for a laptop/phone)
headphones (< $50 for use only while working)
postage

The official IRS instructions for this line says "...the cost of books, professional instruments, equipment, etc., if you normally use them within a year." Many of these smaller items I listed are not used completely within a year...but then, neither are many of TurboTax's examples (i.e. flash drives, calculators, storage and filing boxes) - which seems to contradict the IRS's instructions. I can't seem to find where the $200 threshold mentioned in TurboTax comes from.

TurboTax Business Windows

Best answer by PaulaM

TurboTax's suggestion that supplies are usually less than $200 and last less than a year is just a guideline. There isn't a hard fast rule because each business is unique. A $500 item may be a supply for one business and an asset in another.

In general, after $200 and a useful life greater than one year, items begin to move into the asset section and can't be expensed in one year (they are depreciated). Even the example given in TurboTax 'reference books and guides' clearly can last more than a year. In addition, some professional books/guides can cost much more than $200.

As for miscellaneous items, this category exists for all other expenses that don't fit into one of the categories listed and are not assets. This can be anything.

You did not indicate your business above, but looking at your list you could put:

postage: office expense

cases/headphones: Misc

chargers/AC adapters, wires, tools: Supplies or Misc.

PaulaM

Answer

Alumni - Expert

As for miscellaneous items, this category exists for all other expenses that don't fit into one of the categories listed and are not assets. This can be anything.

You did not indicate your business above, but looking at your list you could put:

postage: office expense

cases/headphones: Misc

chargers/AC adapters, wires, tools: Supplies or Misc.

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taxes4739Author

Level 5

My business is software development (but software that runs on specialized hardware/equipment).

Re: Postage=office expense, since I don't have a separate office space...doesn't this category need to be 0? The instructions say that this is "related only to your office space..."

Re: "In general, after $200 and a useful life greater than one year, items begin to move into the asset section and can't be expensed in one year (they are depreciated)." - I typically take the De Minimis Safe Harbor election, to be able to expense items up to $2500.

Re: "A $500 item may be a supply for one business and an asset in another," I guess that's really the crux of my question: how do you define what a "supply" actually is? What kind of item might be a supply for one business but not a supply for another?

Why would you say that i.e. tools would be a supply, but cases & headphones wouldn't?