Deducting a new Computer

[KrisK2]

I'm confused on the best way to deduct a computer. 
I'd put it under misc. expenses, but 1. found my expenses were over $5K and as a sole proprietor, I'm not sure if there's a limit of under $5K, and 2. saw a note that those items should not include depreciable items.

While I would hope that I will be in business over the next 5 years, I'd just wanted to expense it but keep seeing the 179 depreciation, there is also a 100% Special Depreciation Allowance and I've seen something about Safe Harbor options. I'm really confused.

I've come to understand that I'll NEED to use said computer for the next 5 years solely for business if I choose the 179 option (taking it as an expense now), but I'm unclear as to what:

 - the 100% Special Depreciation Allowance would mean for me 
OR where to find the a Safe Harbor and whether it's a good option for me.

Is there an way to expense the whole thing now without holding me to 5 years (I'm even concerned as to what would happen if it doesn't last 5 years).
Thanks!!!

[AliciaP1]

Since a computer is a depreciable asset, if you take all the depreciation at once, then don't use it for the whole depreciable life, you will recapture the appropriate amount of depreciation that was unused.  The Section 179 and 100% Special Depreciation Allowance deductions both represent taking all the depreciation at once.  Safe Harbor applies to depreciable items that cost less than $2500.  Safe Harbor allows you to categorize these items as business expenses and not have to book depreciation or worry about the recapture with a depreciable life.

If each item you purchased for the computer setup is $2500 or less, you can simply record the expenses and you'll be good to go!

[KrisK2]

If I read that correctly, I can claim the full expense now under the Safe Harbor (somehow) and NOT choose the 179 or  the 100% Special Deduction?
I'd like to do that vs. worrying about the 5 years.  Could you point me in the right direction?

Thanks so much!

[KrisD15]

When you begin by entering the asset, the program asks "Did you buy any items for any business, rental property, and/or farm that cost 2,500 or less in 2022?"

Answer "yes" and continue to take the option to "expense" the cost. 

[KrisK2]

That response doesn't work. 
I enter in the information for the computer and then am prompted to select one of these NONE of which are "simply "expensing this"" 
 
It takes me to theses options to select

1. I'll Spread Depreciation over time  (5 years)

2.  I'll deduct the Full Value Take it all at once - which enacts the 179 Deduction

3.  I'll take a partial section 179 Deduction 
OR

4. I'll take a partial deduction and 100% Special Depreciation Allowance

5.  100% Special Depreciation 

I see nothing that just "expenses" it and uses Safe Harbor avoid the above. 
Sorry I've been stuck on this 1 thing for 6 hours and it's holding up my taxes and I'm now more confused and frustrated. 

[DianeW777 · Accepted solution]

This should help you finish this entry. If you choose to use Safe Harbor for the expense of your computer you enter it under Miscellaneous Expenses and label it 'Safe Harbor Deduction' but you do not enter it as an asset.  Be sure to delete your asset entry for your computer.

f the amount is $2,500 or less then you may be able to directly expense this under miscellaneous deductions when using the DeMinimis Safe Harbor rules.

De Minimis Safe Harbor Election

This election for items $2,500 or less is called the De Minimis Safe Harbor Election. This election is an option you can take each year that lets you write off/deduct items $2,500 or less as expenses instead of assets. Expenses typically reduce your income by a larger amount than depreciating an asset over multiple years does. This means you could get a bigger refund.

If you decide to take this option, a form called De Minimis Safe Harbor Election will show up in your tax return. This election will apply to all your businesses, rental properties or farms.

Here are the rules you need to meet to take this election:

• You don't have an applicable financial statement (most people don't).
• You have a consistent process for how you record expenses and assets.
• You record these items as expenses on your books/records.
• The cost of each item as shown on your receipt is $2,500 or less.
• Rental Property select Edit > Other expenses > Other Miscellaneous Expenses
• Enter Description (Safe Harbor ...) and amount (not entered as assets under this election)

Note:  Because you are under the $2,500 threshold, you are not required to used section 179.  You can list these expenses under Miscellaneous.  If the amount was over 2,500, then you would enter these as assets and then would be able to choose the 179 option.

• Maintain a complete record with your tax return should you need to verify these items at a later time.

@KrisK2 

[KrisK2]

Ah... so I stick within the Miscellaneous never going into Assets!
THANK YOU SO MUCH @DianeW777 
I'm going to enter it now as a line item, Safe Harbor Deduction now. 
You've taken a HUGE weight off of my shoulders. Thank you! On to State Taxes.. 

[a59505950]

I purchased a computer for $1500 same year as my taxes. It is 100% for my rentals. I want to write it all off (it will be used for 5 future years) and NOT recapture depreciation. I may have a loss this year but I understand it will be carried forward. Next year I will have positive income. Can you point me out  where I can find THE FORM?
Can I split the use of the computer among my rentals or should I just apply the deduction to one rental?

THANKS!