Business deductions

[Chijim]

Last year I bought a new laptop to replace my old one in my small business.  I also bought a good desk chair for my home office. Are these deductible. If so, where do I deduct them. "Supplies" seems to be limited to small items. 

[DavidD66]

Yes, if you are a business owner/self-employed, those are deductible business expenses.   The type of business you indicated in the interview will determine what categories the program shows to select from.  You can use "Office Expense", "Supplies" or "Assets".  I recommend you use "Assets" so you will be given the opportunity to take the de minimus safe harbor election.  This allows you to expense "assets" like computers and furniture that cost less than $2,500, rather than capitalizing them. By going through the Asset section, and indicating you have purchases of $2,500 will prompt the program to guide you through the interview for this.

[Chijim]

So how do I actually access this, since "Assets" is not immediately visible to me

[HelenC12]

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). 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.

It looks like you're using TurboTax Home & Business CD/Download. To enter your assets or expense your assets:

1. Log in to the software and open your tax return
2. Search for business expenses in the search bar and select the Jump to link in the results
   • If you land on the Business Summary screen, select Edit next to the business you’re entering assets for, or Add another business to enter a new business
3. Answer the questions about your business until you get to the Business Expenses screen
4. Select Start or Update next to Assets and depreciation
5. Answer Yes to the question Did you buy or own any assets, other than vehicles, in this business?
6. On the next screen, answer Yes to the question Did you buy any items that each cost $2,500 or less in 2022?
7. Answer the questions on the following screens. On the screen Now, let’s review each item you bought:
   • If you select Every item I bought costs $2,500 or less, you will be taken back to the Your Business- screen, where you can enter each item you would like to expense in the Other Miscellaneous Expenses section
   • If you select Some items I bought cost $2,500 or less and some cost above $2,500, you will be asked about building improvements on the next screen
   • If you made building improvements for your business in 2022, answer Yes, and follow the instructions below to make the Safe Harbor Election for Small Taxpayers
   • If you didn’t make any building improvements, answer No, and continue through the questionnaire to return to the Your Business screen. We will generate the De Minimis Safe Harbor Election form and add it to your tax return

If you're using the TurboTax Online version, click here for the instructions.