What do i claim as assets

[ryano_111]

I started a side business doing auto repairs out of my home barn I have a lift and some other machines, tools  etc  what do I claim as an asset and depreciate  vs just marking down under miscellaneous / other   is it better to depreciate over a period or take it all at once  does it matter

[AmandaR1 · Accepted solution]

If you have assets that cost less than $2,500, it's just easier and faster to enter their total cost under the miscellaneous costs. If you are close to having a business loss, then it can make sense to add the items and take depreciation so save the write offs for the future years. 

Depreciation spreads the cost of the asset out, as a deduction over 5 or 7 years (most commonly), so if the asset is $100, then you are only taking a small portion of this amount each year. 

For items that costs more than $2,500, you should add them as assets and you'll be prompted to spread the cost out over the useful life as defined by the IRS.  However, as long as you invested less than $500,000 in assets, you'll be offered to take Section 179 deduction, which allows you to write off the entire amount. 

So, you'll have this option in either case, but it will be faster to enter the cost under miscellaneous expense, than to have to add the asset to the software.