How exactly do we handle writing off startup expenses for dog grooming equipment and supplies?

[stechman]

We purchased equipment both before and after we began taking clients. Some of this equipment is expected to last for several years (i.e., grooming table, clippers...), while other items are consumable supplies (i.e., shampoos). Initially, I categorized all of these expenses as Schedule C: Supplies (not from COGS) in Quicken, but I realize now that much of the equipment may be considered depreciable assets. What is the best way to handle this?

[AmyT · Accepted solution]

You are now (since 2015) allowed to treat the purchase of assets that cost $2,500 or less (per asset, not in total) as expenses in the year purchased.

This is considered the de minimis exception by the IRS.

However, if any of your purchases were for items that will last several years and cost more than $2,500, they should be reported as fixed assets and depreciated.

[stechman]

Thank you very much for this information. Given that none of our equipment cost more than $2,500, what should they be classified as on our schedule C? Or is this ultimately not important (i.e., can they be classified as Supplies (not from COGS) as they are currently)?

[AmyT]

I would probably call them something like "supplies" or maybe "small equipment".  The exact description is not particularly important, but it should be consistently treated from year to year.