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Home computer: Section 179 deduction

by on
in Small Business Tax,Small Business Tax Deduction Strategies

Q. I bought a new computer through my self-employed business. Can I deduct the full cost if I use it at home? S.B., Buffalo, NY

A.  Not exactly. You’re entitled to deduct the portion of the cost attributable to your business use. Example: If you use the computer 75% for business and it cost you $2,000, you can write off $1,500 (75% of $2,000).

Normally, the cost of a computer must be depreciated over five years, but it is eligible for the Section 179 deduction if you use it more than 50% for business.

Tip:
You may be able to claim business write-offs for a computer even if you don’t qualify for home-office deductions (i.e., your principal place of business is elsewhere).

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