Thank you for clarifying that Coleen! 🙂 I will deduct the $50 under the De Minimus safe harbor election.
I went ahead and reread the Tangible Property Regulations “Frequently asked questions” Publication again and now it kinda seems to me like I shouldn’t be utilizing line 22, even for things like cleaning supplies and pens?! Maybe I’m interpreting it wrong but I came across the following question and answer on the “frequently asked questions” and it says you MUST include any qualifying materials and supplies if choosing to take the De Minimus election.
can you help clarify this?? Thank you.
https://www.irs.gov/businesses/small-businesses-self-employed/tangible-prop[product key removed]atio...
“ frequently asked questions”
“When can you deduct the costs of materials and supplies?
As under prior rules, you may deduct the costs of incidental and non-incidental materials and supplies in the following manner:
- Incidental materials and supplies – If the materials and supplies are incidental, i.e., of minor or secondary importance, carried on hand without keeping a record of consumption, and no beginning and ending inventories are recorded, e.g., pens, paper, staplers, toner, trash baskets, then you deduct the materials and supplies costs in the taxable year in which the amounts are paid or incurred, provided taxable income is clearly reflected.
- Non-incidental materials and supplies – If the materials and supplies are not incidental, then you deduct the materials and supplies costs in the taxable year in which the materials and supplies are first used or consumed in your operations. For example, deduct certain expendable spare parts in a trucking business for which records of consumption are kept and inventories are recorded in the taxable year the part is removed from your storage area and installed in one of your trucks. However, an otherwise deductible material or supply cost could be subject to capitalization under § 263(a) if you use the material or supply to improve property or under § 263A if you incorporate the material or supply into property you produce or acquire for resale.
- Application with de minimis safe harbor – If you elect to use the de minimis safe harbor and any materials and supplies also qualify for the safe harbor, you must deduct amounts paid for these materials or supplies under the safe harbor in the taxable year the amounts are paid or incurred. Such amounts are not treated as amounts paid for materials and supplies and may be deducted as business expenses in the taxable year they are paid or incurred. “
