Computer hard drive used more for business than personal, is it an expense (supply) or asset

[Nate402]

Good day. I bought a $300 external desktop hard drive to use for my business. I use it 70% of the time to store large files from my video work, but I do have a few personal files on it. Should I deduct this as a Business Expense (Supplies) or as a Business Asset?

Whenever I buy flash drives or hard drives that I use for business purposes 100% of the time, I've always entered them as a Business Expense (Supplies). But this hard drive I bought and use stores mostly files for my business (about 70% of the space), and I also store some personal files on it. It's an external desktop hard drive, so it just sits on my desk and does not move.

Thank you.

[ColeenD3]

You will have to list it as an asset and monitor your personal use each year, as it may vary.

[Nate402]

Thank you for your reply! When entering it as a Business Asset in Turbo Tax, it asks me "How do you want to deduct this item?"

I can choose:
"I'll deduct the full value of the item this year (take the Section 179 deduction)."

Can I just choose that option and deduct the full value and then not take any deductions for it next year?

[AnnetteB6]

Yes, you can choose that option.  However, if your business use of the hard drive drops below 50% in any given year until it would have been fully depreciated, you will need to recapture some of the Section 179 deduction.  

See the following TurboTax help article for more information:

What is a Section 179 deduction?

[Nate402]

Thank you! Yes, this hard drive is going to sit on my desk and store all my work files for it's entire lifespan, and will always be around 70% of its space.

One other question. If I take the Section 179 deduction for the hard drive this year, would I list that on next year's tax return under the Business Asset section? Or would I not list it next year since I am choosing to deduct the full value of the item and take the Section 179 deduction this year. I assume I should not include on next year's return.

I only ask because in 2020 I took the Section 179 deduction for a computer that I used for work 80% of the time, and when I started up Turbo Tax 2021 and transferred my 2020 return, it carried over that computer into this year's return. I deleted it from this year's return because I chose to deduct the full value of that computer and took the Section 179 deduction in 2020. That's what I was supposed to do because I chose the Section 179 deduction, correct?

Thank you!

[ColeenD3]

No. Do not delete the asset. If you were to sell it before its useful life,  or if the business percentage drops below 50%, you will have to recapture depreciation.