You will report your new equipment as a business asset on next year's tax return. You cannot set the equipment up as a depreciable asset until you are making income. The IRS requires you to depreciate equipment in the tax year that your equipment is placed in service. Then, you will file as a self-employed taxpayer and set up your business on Schedule C where you will list your business equipment. You may decide to depreciate or expense this property. Please view the TurboTax FAQ below for more information about this option.