Can I Deduct Computer purchases from taxes?
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Can I Deduct Computer purchases from taxes?

My wife and I are both primarily W2 employees but between the two of us we have about 20K of self employment income (side jobs). We both bought new macbooks that we use almost exclusively for work. Can I deduct the full price of those computers from the self employment income portion as job expenses (or in any other way)? Or is it solely if I was only getting paid as a non W2 employee? 

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Level 15

Can I Deduct Computer purchases from taxes?

Computers are listed equipment, which means there are extra rules for depreciation. 

First, you must keep records of your computer use (W-2 work, self-employment, personal).  If you don't have records of some kind and are audited, the IRS does not have to allow any deduction that you can't prove.

Then you can deduct or depreciate the percentage used for your W-2 job as an unreimbursed business expense itemized deduction subject to the 2% rule; you can deduct the percentage of use for your self-employment as a schedule C expense, and you can't deduct the percentage used for personal use.  If no one use is more than 50% of the total, then you have to use depreciation, rather than the section 179 depreciation allowance.

You can't deduct 100% of the cost as a schedule C expense unless 100% of the use is for that work.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
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