ColeenD3
Expert Alumni

Business & farm

While you have ruled out that these items are not inventory, you haven't ruled out that they are not assets. How much did the items cost? Will they last more than a year? If they are assets, they need to be depreciated and they are not supplies. 

 

There is another option.

 

When you purchase items for your business, you can either deduct the full cost of the expense at once, or you can deduct the cost over multiple years (depreciation).

The De Minimis Safe Harbor election lets you deduct the full cost of items worth $2,500 or less, instead of depreciating. You can also use the Safe Harbor Election for Small Taxpayers to expense the cost of improvements to business buildings if you qualify.

These elections are available for Schedule C businesses, rentals, farms, and farm rentals.

For instructions on claiming the De Minimis Safe Harbor Election in TurboTax, select your product:

TurboTax Online Self-Employed

TurboTax CD/Download

Why would I want to take these elections?

These elections let you deduct your items as expenses instead of depreciating them over the life of the item. One-time expenses typically reduce your income by a larger amount than depreciating an asset over multiple years. This means you could get a bigger refund.

If you take these elections, they will apply to all your businesses, rental properties, or farms.

Related Information: