Writing off a laptop (or equipment) for work... do you go prefer to go with depreciation or a one time write off?

I'm debating on treating myself to a new laptop. This one is about to hit 5 years old. It was around $1100 and it's certainly earned its keep but I kinda want to treat myself to a new one for work and turn this one into my lounge laptop.

The new one I am looking at would likely run me about $2400 depending on the programs and mods I do on it. I suppose it's more of a personal choice, but I figure I'll write it off in a single tax year. Anyone depreciating their laptops, cars, or cellphones and how does it work as a better fit for you?

MegglesKat

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It really depends on how much IC net income you expect this year and/or in several future years. Try out a few scenarios using different SE income assumptions. That said, I always have taken the one time write off.

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I think the one time write-off will likely almost always be the best decision for me with a laptop, phone, camera, etc and then per mileage with the car. Taxes seem like they may be more of a headache this year, but I'll follow the program. With medical expenses, marriage, write offs of equipment, grad school and maybe moving --- bleck.

MegglesKat

I have been an IC/Mystery Shopper for over 10 years, and have been doing my own, and others, itemized taxes for other ICs. My personal opinion, and what I would do, is to take the one time write-off for any office equipment. I consider things like a laptop or mobile phone as office equipment. Another criteria to use would be anything that will probably not last more than 5, or maybe 7, years. However, I do depreciate my car. About 90% of my driving is for my IC work, and my husband has his own car. I drive between 15,000 and 25,000 miles per year, depending on what work I get. In order to take advantage of depreciation on your car you need to use "actual expenses." The "standard deduction" includes an allowance for depreciation. If you have an older car, say over 5 years old and/or one with a book value of less than $10,000, and drive no more than 10,000 miles, you will probably be better off using the standard deduction. Using actual expenses means you need to document every penny you spend on the car, including gas.

You may need to talk to a tax expert (CPA). If your business is a loss without the cost of the laptop you may be required to depreciate it.

Definitely talk to someone familiar with IC taxes. Do not take advice from unknown people on the Internet.

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I wasn't asking for tax advice, I was just curious if depreciation works well for anyone. I'm going to go with a one time write off and do my own taxes, as always. I know some folks like the depreciation over time and was curious how it works out best for others. Some people like to do the quarterly taxes too. When tax time hits, the questions are abundant here and things get tense 0_o

MegglesKat

The only time depreciation has worked well for me, rather than an immediate deduction, was when I bought a truck specifically for some IC work I had locally. The income was not that great, and all the miles, were local miles (not much mileage over all), so depreciating the vehicle over 5 years, worked much better.

That definitely gives me a better perspective on how it could work well for IC work when you break it down that way. Last year, I put about 46,000 work miles on my Equinox. The mileage for me was better in that case but seeing the way you broke it down, I think the depreciation would work best. I do tend to get a laptop every few years but the one time will likely work to my advantage. I get started early on my taxes so I may play around a bit and see how things are going to go once December wraps up.

MegglesKat

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Writing off a laptop (or equipment) for work... do you go prefer to go with depreciation or a one time write off?

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