Kelly Bullis
In this day and age, just about everybody owns a cell phone and most also have a computer. Well, if you use them in your business, have I got good news for you!
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) also were 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, your daughter prints 120 pages of school material she needs to read. Under that rule, you have very little “business use” that night.
Trump’s Tax Cuts And Jobs Act (TCJA) of 2017 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 device 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 for 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 the depreciation rule. If your business has a loss this year, but expect a profit in the next, depreciating over 3 years might be a better idea. Also, Cities and Counties love to tax the Fair Market Value of all business property. For them, if it’s on your depreciation schedule, it’s subject to their property tax.
Now I’m really going to blow your mind. Recently, the IRS revised their “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!
By the way, these same rules apply to cell phones. Use it for business? Then 100% deductible.
Have you heard? Proverbs 24:26 says, “An honest answer is like a kiss on the lips.”
Kelly Bullis is a Certified Public Accountant in Carson City. Contact him at 775-882-4459. On the web at BullisAndCo.com Also on Facebook.