Equipment expense

[Samurai13]

I bought all types of equipment (2019) for my new business, (table saw, miter saw, paint sprayer, etc.,). My question is, do I list it in the “Other” section of Schedule C, or as a Section 179 deduction, or as startup costs and where would that be listed?

[DavidD66 · Accepted solution]

You would not list them as Start up costs.  For items less than $250, you would just list as Other Expenses.  If you have items more than $250, but less than $2,500 you can expense them by using the De Minimus Safe Harbor Election.  For items with a cost greater than $2,500 you would enter as assets, but you can expense them using section 179, but only if your business made a profit.  To enter items you wish to expense using the De Minimus Safe Harbor do not enter them as assets.  Enter them under the expense section. To take the election, you will need to go to the Asset Entry section and answer the applicable interview questions. 

• On the screen with "Did you buy any items for any business, rental property and/or farm that cost $2,500 or less in 2019?" Answer Yes.
• The next page will say "Let's see if you can deduct these items as expenses"
• Answer Yes, if both items apply to your situation
• You will then be asked if you want to make the election. 
• Answer Yes to make the election.

[Samurai13]

You are awesome. I appreciate the quick response. 

I saw this in the tax books I researched, but wasn't quick sure how it worked. 

Will this be available next year as well?

Once again, thanks.

. . . 

[Irene2805]

Yes - The De Minimus Safe Harbor Election should be available in 2020 and beyond (or until Congress decides differently)  There is currently no expiration date.  

You do have to make the election on your return every year, though, if applying it to new assets.