Last year I started my software business (sole proprietorship). I've got 2 issues related to this. For years I have been paying for online training on software development. Before working on my 2017 income tax return, I remember previous years TurboTax asking about any unreimbursed training expenses. I've never been able to claim this training before, because it cost me something like $300. I guess it was too small, nothing thousands of dollars. I'm wondering if the cost of the online training may now be deducted since it is most certainly related to the business?
Second, I needed to buy a license for Office 365 for the laptop I purchased for the business. This is something that is a subscription, so I've got to do the same thing again next year. Is this something I would put into miscellaneous business expenses or something like that?
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the IRS allows self-employed workers to deduct some training costs, including transportation to and from course locations. However, you cannot deduct training expenses related to transitioning to a new career.
Now take a look under the Business Expenses heading. You have three sub-sections in/under there. Select Other Common Business Expenses. You see quite a number of common categories listed there. The last on is Other Miscellaneous Expenses. That's where you'll identify and enter your training costs. Note that you can only claim costs that are directly related to the business, and only those costs incurred in 2017.
" I needed to buy a license for Office 365"
Same sub-heading as above. In there you'll see a category for Taxes & Licenses. That's where you enter what you paid for the Office 365 subscription license. (If you click the more examples link, it specifically includes software licensing expenses)
".....for the laptop I purchased for the business"
If you paid less than $2,500 for that laptop, you are not required to list it as a business asset and depreciate it. You can just claim it as a business expense and be done with it. Besides, depreciating a $1000 laptop over 7 years will have practically no impact on your tax liability anyway. But recapturing that depreciation as required by law when you no longer use that laptop for the business, will definitely increase your tax liability. Therefore, if it cost you less than $2,500 you can just expense it in the Business Expenses section and be done with it. You'll claim it in the "Supplies" category.
Now if your business will be dealing with inventory, darn near everybody screws that up royally their first year. So let me know if your business deals with inventory, and I'll help you to ensure you got it right that first year.
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