I use my new computer 90% of the time for work. How can I claim my Apple Laptop as a work expense?

[days1yeates]

bought in feb 2020

[Bsch4477]

You can use the percentage of business use as a deduction but only if you are self employed. 

[Opus 17]

First, your computer is not an expense, it is an asset. Assets must be depreciated over their working lifetime. In some cases, you can take the depreciation the first year that you put the asset into service, but this creates additional tax consequences down the road if you later stop using the asset in business.  For example, if the asset class life of a computer is five years and you take section 179 depreciation to depreciate the entire cost the first year, and then you stop using the computer in business before the five years are up, you may have a taxable event called depreciation recapture.

You can list the computer as a business asset on your schedule C and TurboTax should advise you on what types of depreciation are available. Later, if you stop the business or stop using the computer in the business, you will also report this in TurboTax when it happens, and TurboTax will advise you on whether there are any taxable consequences.

Second, the value for depreciation purposes is either the purchase price, or the fair market value when the asset is placed in service, whichever is lower.  If you bought the computer new in 2020 but you did not begin using it in your business until 2021, then it is placed in service in 2021 and the value that you assign in TurboTax for purposes of depreciation is the fair market value of it as a used computer when placed in service.

third, if you are unlucky enough to be audited, the IRS will want to see some kind of reliable written record showing that you use the computer 90% for business and how you determined that percentage. You might have a data log or a time log or an app you use to keep track of your business and personal use, but you must have some type of reliable record, otherwise, the IRS does not have to allow it as a business expense.

[Bsch4477]

Computers you purchase to use in your business or on the job are a deductible business expense. If fact, you may be able to deduct the entire cost in a single year. And computers are no longer considered listed property under the Tax Cuts and Jobs Act so there is less record keeping required and you can use bonus depreciation.

[Opus 17]

@Bsch4477 

The fact that computers are not “listed property“ removes some restrictions that were in place if the asset was used less than 50% for business. It did not, as far as I know, remove the general requirement that all business expenses must be properly allocated to the business and supported by proper recordkeeping. Whenever you have an asset or expense that is shared between businesses or between business and personal use, you must have adequate reliable records to show how you allocate the cost to the business.

In fact, I can recall a tax court case involving 2 married college professors who, among other things, claimed a business expense deduction for their personal computers and their Internet use based on the fact that part of their use was allocated to writing books rather than their W-2 job.  The tax court denied the expense deduction because the professors did not have any records showing the basis for their allocation of computer expenses to the book-writing, rather than their jobs or personal use.

[Bsch4477]

@Opus 17 Agreed. Adequate documentation is required for all deductions.