The new A/C unit should be added as a depreciable asset. You have a choice in handling the expense of the water heater and garage door:
- You can enter them as assets and depreciate them over time; OR
- Since the value is under $2,500 (the portion attributable the home office), you can claim the cost as expenses under the de minimis election.
To enter the expenses and assets for your home office, please follow these steps:
- Click on Income and Expenses and then click the Start/Revisit box in the Self-Employment section.
- On the Your 2020 self-employed work summary screen, click on Edit next to your business.
- If you've already started to enter information on your home office, in the EXPENSES section click on Edit next to Home Office. On the Home office summary, click Edit next to your office.
- If you haven't started, on the Here's your [business] info screen, click on the box Add expenses for this work.
- On the next screen click the radio button next to Home Office and click Continue at the bottom of the screen.
- Continue through the interview, entering the requested information.
- On the screen, There's a simple way to get this deduction — do you want to take that?, mark the box No, I want to take actual expenses.
- On the screen, Expenses for [XX]'s home office, mark the radio button that all of the expenses apply to the entire home.
- If you want to take the water heater and garage door as expenses (rather than depreciate them) you can enter them on the Enter repair expenses screen. Enter the entire expense and TurboTax will calculate the amount allocated to the home office.
- You will be brought back to the Home Office Asset Summary.
- Click Add an Asset to enter the A/C as a depreciable asset.
