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Thread: Understanding write offs.

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    Veteran Member BlondebombGA's Avatar
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    Default Understanding write offs.

    Hi all. This is my first year claiming as an independent contractor/self employed. I do cam work, and have been considering going ahead and purchasing an additional laptop so I can get a bit more non-camming things accomplished when working, separate my work and other life on 2 different computers, and have a back up just in case. My question is, if I purchase this lap top prior to the new year, will I basically be reducing my taxable amount by the equal amount of the laptop? If so it seems like a win win. Is my thinking correct on this? Thank so much.


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    God/dess Zofia's Avatar
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    Default Re: Understanding write offs.

    Any ordinary and necessary business expense is deductible from your business income. Under current rules, a computer does not need to be depreciated over a number of years, so yes, you could deduct in 2012 if you purchase by the end of the year. Frankly, lots of businesses spend some money in December just for this reason. However, your description of the computer sounds more like it is for personal use rather than an ordinary and necessary business expense. Are you sure that the cam computer doesn't need to be retired to home use and a new cam computer acquired?

    HTH
    Z

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    Veteran Member BlondebombGA's Avatar
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    Default Re: Understanding write offs.

    Glad you said that Z. I may have forgotten that it needs to be a work pc once I realized the pain of transferring all the work stuff. I appreciate the info.


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    Banned Melonie's Avatar
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    Default Re: Understanding write offs.

    ^^^ with the 'fiscal cliff' confusion in Washington, I second Zofia's advice to buy as much 100% business related new equipment as possible before the 1st of January. For the balance of 2012, expensing of business related equipment by small businesses has a sky high dollar limit and will draw very little attention from the IRS.

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    Curious Guest AnistonGarner's Avatar
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    Default Re: Understanding write offs.

    Hi All

    I'm new to SW, and am quickly learning a lot of incredibly valuable information. I'm going to start camming in 6 weeks or so on MFC, and in preparation, have purchased a new computer because my old laptop was dying. I haven't set up a business/llc/llp or anything like that. Can I still deduct this as a business expense when I do?

    Thanks so much! xx AG

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    Banned Melonie's Avatar
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    Default Re: Understanding write offs.

    yes you can, as long as you still have your old laptop for 'personal' use such that the new computer is used strictly for 'business'.

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