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When can you deduct home PCs?

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in Small Business Tax,Small Business Tax Deduction Strategies

Q: I bought a second home computer recently because my new job requires communication at all times, and my kids are always on our other computer. I use the new machine to interact with clients from home. Since my employer is all for it, can I deduct the computer's cost? M.L.P., New York

A: As an employee, you can deduct the cost of a home computer only if it's a "condition of employment." That's based on the facts and circumstances of each situation, but it sounds like you have a pretty good case. To strengthen your tax position, obtain a written statement from your employer that it requires home PC use, and use the new PC exclusively for business. Remember, you can deduct employee business expenses only after those annual costs (combined with any other miscellaneous itemized deductions) exceed 2 percent of your adjusted gross income. Note: Business owners can generally deduct the cost of computers used for business using the Section 179 expensing limit.

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