I started my single-member LLC in 2022 and purchased a mac book purely for my business use.
Should I report this macbook as the business expense? or as the business asset for depreciation ?
If I report it as the depreciation, when I close my business, do I need to pay back the money that I am able depreciate before?
It depends on which gives you the best tax situation. Your Macbook is eligible to be reported either as an expense, with the Section 179 election, or as a depreciable asset over 3 years in the year of purchase. If expensing the computer would result in a loss you should depreciate it as an asset instead. Section 179 expenses cannot create a loss. It can only offset income, so it carries forward any amount that would make your net income less than $0.
If you close your business before the 3-year life is expired, you do not "pay back" the depreciation, but would report the gain or loss from the current value compared to the depreciated value. If you close your business after the 3-year life is expired, you will report the value of the computer at the time as a gain, since it will be a $0 value for tax purposes.
It depends on which gives you the best tax situation. Your Macbook is eligible to be reported either as an expense, with the Section 179 election, or as a depreciable asset over 3 years in the year of purchase. If expensing the computer would result in a loss you should depreciate it as an asset instead. Section 179 expenses cannot create a loss. It can only offset income, so it carries forward any amount that would make your net income less than $0.
If you close your business before the 3-year life is expired, you do not "pay back" the depreciation, but would report the gain or loss from the current value compared to the depreciated value. If you close your business after the 3-year life is expired, you will report the value of the computer at the time as a gain, since it will be a $0 value for tax purposes.
If after recording it as an expense should it then be recognized as an asset on the balance sheet? If so, how should that be carried out?
You either expense the item or depreciate it ... you do not do both.
Also computers and their peripherals are 5 year properties not 3. https://www.irs.gov/pub/irs-pdf/p946.pdf