Tax Tips (and other stuff)
Here’s something that might make your life a bit easier.
Did you know that you are supposed to keep a record of business use on listed property items for tax purposes? Listed property per the IRS includes passenger vehicles, other property used as a means of transportation and property used for entertainment, recreation, or amusement.
Previously, computers and peripheral equipment (like laptops, tablets, and printers) were also on that list. Can you imagine keeping a log on every time you used your laptop? How about every time you printed something? Let’s imagine that in an evening, you print 12 pages for business-related work and your daughter prints 120 pages of school material she needs to read. Under that rule, you have very little “business use” that night.
Well, the Tax Cuts And Jobs Act (TCJA) of 2017 changed that. It took computers and peripheral equipment off the list of property that you must keep logs and records of the business use. Now, you own a computer and/or peripheral devise and use it for business, the IRS allows you to write off 100% regardless of any personal use that might occur.
This is huge with so many folks working from home recently.
What does this mean for the average business owner? If you provide computers and/or peripheral devices to your employees to use outside of the office, you no longer need them to keep logs on the business use. You get to write off the cost, 100%, no questions asked by the IRS.
You should still consider depreciation rules and most likely put at least the more expensive computers on your depreciation schedule. Also, cities and counties love to tax the fair market value of all business property. Make sure you list certain depreciable computers and peripheral devices that are not located on your normal business address.
Now I’m really going to blow your mind. Recently, the IRS revised its “repairs” regulations. If you make it your standard business accounting policy to just expense items that you purchase for your business that fall under a dollar limit of no more than $2,000, then the computer and peripheral devices (which are usually less expensive than $2,000 unless you purchase an Apple computer) can just be expensed to supplies and not ever listed on your depreciation schedule. What a deal!
Have you heard? Psalms 112:5 says, “It is well with the man who deals generously and lends; who conducts his affairs with justice.”
Kelly Bullis is a Certified Public Accountant in Carson City. Contact him at 882-4459. On the web at BullisAndCo.com. Also on Facebook.
