topic Re: Maximum expensing threshold for a tangible asset? in Deductions & credits

Maximum expensing threshold for a tangible asset?

DaveLaQ — Fri, 08 Oct 2021 13:56:34 GMT

I can't seem to find the answer to this anywhere. Everything talks about when you *can* depreciate and asset or when you *can* use the Safe Harbor election.

I want to know when I *have to* use one of those. Better yet: up to what cost threshold can I expense an otherwise depreciable asset—without using Safe Harbor or Section 179?

I've got a bunch of stuff that costs tens or a couple hundred dollars. Surely there's some threshold up to which I can simply expense these items this year without having to jump through any such hoops. These are not supplies. These are items that have a useful life of years.

$300? $500? $2500? I've even read a few things that said a business can adopt a capitalization policy which would allow me to do what I want (if I'm understanding correctly) by picking my own threshold (like $2500 or $5000). But it's not crystal clear to me that this is exactly what they were saying. If that's what they meant, why would safe harbor even be a thing?

I'm also a sole proprietor, so I don't know how that may/may not impact all this. Help!

Re: Maximum expensing threshold for a tangible asset?

Anonymous_ — Fri, 08 Oct 2021 14:32:59 GMT

@DaveLaQ wrote:
I've got a bunch of stuff that costs tens or a couple hundred dollars.

You do not need to use the safe harbor for assets that cost $200 or less. You can expense those assets as "materials or supplies" (provided they are not considered inventory).

See https://www.irs.gov/businesses/small-businesses-self-employed/tangible-property-final-regulations

Re: Maximum expensing threshold for a tangible asset?

DaveLaQ — Fri, 08 Oct 2021 16:07:03 GMT

Thank you so much. Thirty seconds of reading your response and checking your linked reference sure beats ten minutes of unsuccessful googling!