Get your taxes done using TurboTax

If you are self-employed, you are allowed to deduct ordinary and necessary expenses for your kind of work.  Necessary does not mean "essential", but you wouldn't need a device to make zoom calls if you were an Uber driver.

 

When you are self-employed, you file a schedule C as part of your tax return that lists your income and expenses.  You are required to report all your income and expenses even if you don't get tax paperwork like a 1099.  You don't file a 1099 yourself (unless you pay subcontractors) -- your income might be reported to you on a 1099 but you report all your income and expenses to the IRS on a schedule C.

 

Computers, cell phones and other devices might be ordinary and necessary business expenses for the work you do.  List the item as a business asset (equipment with an expected life of more than one year).  Depending on the cost, the other things you have bought this year, and what you use it for, you might be able to take the entire cost as an expense, or you have to spread it out over it's useful life in business (3 or 5 years, probably).  Turbotax knows the regulations and will treat the property correctly if you identify it correctly.  It matters greatly if you use it 100% for work, partly personal use but more than 50% for work, or mostly personal and less than 50% for work.

 

Expense deductions are never reductions in your tax, they are reductions in your taxable income.  For example, if you are paid $10,000 gross but you have $1000 of expenses to generate that income, then you have $9000 of "taxable income" or "net profit" or "taxable profit."  And the tax on $9000 is less than the tax on $10,000 so that's how you save.

 

Also be aware that once the tablet is listed as a business asset, you have to report when you sell or dispose of it, and that might be taxable income.  For example, if you sell 3 years from now for $100, that might be taxable business income, even though it would not be taxable income if you sold a used personal device. 

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