best way to buy a computer for my side business

"usenetjb" wrote

Really? Not more than $1000.

The real question is when can you deduct it.

And that lies in a term called *depreciation*, which is how you expense any given business asset over time. Computers are 5 year property, a government term meaning that you depreciate (expense) them over 6 tax returns. Of course, there is always a possibility that you can expense them quicker, given the right set of facts and circumstances.

-- Paul A. Thomas, CPA Athens, Georgia

"Paul Thomas" wrote in news:122vp0jmspmu323

yeah just a cheapo file server really. for some reason, i have the idea that if its 100% used for my side business, then that would be better tax-wise. is that not correct?

how so? could u explain a little more?

thx

"usenetjb" wrote

As opposed to not deducting it, yes.

Section 179 allows you to deduct the cost of assets purchased and placed in service in the current year subject to limitiations. One of those limitations is profits of the business. So if your business shows losses, you can not take Section 179 expenses. There are limits on how much a business can expense through Section 179, but a $1000 computer is well within those limits. There are some slight twists for someone who is self-employed, and expecially if you have earned income from other sources (like a W-2). So you may want to talk to a tax advisor in your neighborhood.

-- Paul Thomas, CPA snipped-for-privacy@bellsouth.net