How to Write Off Your Computer

The computer write-off is one that must be carefully documented and justified. Whether you have a computer for personal, educational or occupational use, it is important to first determine if you are eligible to include it in your tax deductions. Once eligibility has been verified, you are able to complete the actual process of writing it off. This process doesn't take long, however there are many things to take into consideration along the way.

Determining Write-off Eligibility for Personal and Educational Use

To determine whether or not you will be able to write off your computer, you must decide how it is used on a day to day basis. Computers that are deemed for personal use only cannot be written off. Computers that are purchased for a student’s education is considered to be a personal expense and therefore not deductible. The exception to this rule is if the computer was issued through the school and is later billed through tuition.

Determining Write-off Eligibility for Self-Employed and Employee Use

If you are self-employed and have purchased a computer for your business, there are a few things that you must consider when deciding how much to write off. If you use the computer solely for business purposes, the entire cost can be written off. However, if it is for both personal and business use, you will need to determine the percentage of time spent doing both. An example of this would be a computer used for business 80% of the time. If this is the case, 80% of the cost can be written off. Note that depreciation factors into the cost and will be considered over the next 3 to 5 years. If you are an employee and the computer is used for business, there are a couple guidelines that need to be met. Besides being used only for business purposes, you must also factor in the cost of the computer as well as your adjusted gross income (AGI). Determine what 2% of your AGI comes out to be. The cost of the computer must be above this amount to be considered eligible for a write-off.

Writing off Your Computer

If you have determined that your computer is eligible for a write-off, you will need to gather the proper forms. If filing on-line or with tax computer software, the forms should be provided for you. If you prefer to do it via mail, you can find the correct forms at the post office, public library, local IRS office or village hall. Some universities also provide them. If you are self-employed, fill in the proper amount on the Schedule C. When filing as an employee, you can list it as an itemized deduction on a Schedule A 1040 form. Keep receipts even after finishing your tax forms. It is important to save them for at least 7 years in case you get audited. Proper documentation can clear up any inconsistencies.

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