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Subject Author Date
Computer Depreciation Kathrin 03-07-2007
Posted by Kathrin on March 7, 2007, 4:30 am
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 I bought a computer in December 2006 for 95% business use
(sole proprietor). The cost for it was around $900 dollar
and I'm using the 5-year depreciation. I don't know much
about taxes and thought it would help me to pay less, but
when I plugged in the numbers I saved $45 dollars for the
first year. Does that sound right? I really did not need a
new computer and if I had known that this is all, I could
have waited another year or so. I'm using taxact software.
Thank you.

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Posted by Benjamin Yazersky CPA on March 7, 2007, 11:45 pm
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> I bought a computer in December 2006 for 95% business use
> (sole proprietor). The cost for it was around $900 dollar
> and I'm using the 5-year depreciation. I don't know much
> about taxes and thought it would help me to pay less, but
> when I plugged in the numbers I saved $45 dollars for the
> first year. Does that sound right? I really did not need a
> new computer and if I had known that this is all, I could
> have waited another year or so. I'm using taxact software.

That amount makes sense to me.

When you place assets in service in the last 3 months of the
year, you may be subject to mid quarter depreciation
calculations. It depends on the depreciable assets acquired
during the year and when you acquired them. This has the
effect of limiting the first year's depreciation deduction.

Another option to look into is expensisng under sec 179.
Whether or not that is a good idea for you in your
circumstances is another matter.

___________________________________
<<< Benjamin Yazersky, CPA [NJ & NY] >>>
-----> real address on hobokeni or hobokenx <-----

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by rlsusenet@NOSPAMPUHLEEZschnapp on March 7, 2007, 11:45 pm
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Kathrin wrote:

> I bought a computer in December 2006 for 95% business use
> (sole proprietor). The cost for it was around $900 dollar
> and I'm using the 5-year depreciation. I don't know much
> about taxes and thought it would help me to pay less, but
> when I plugged in the numbers I saved $45 dollars for the
> first year. Does that sound right? I really did not need a
> new computer and if I had known that this is all, I could
> have waited another year or so. I'm using taxact software.
> Thank you.

You'll get more in subsequent years. Since you bought the
computer in late in the year (December), you got very little
depreciation on it. Next year, you'll get a lot more.

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by ltsllc on March 7, 2007, 11:45 pm
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> I bought a computer in December 2006 for 95% business use
> (sole proprietor). The cost for it was around $900 dollar
> and I'm using the 5-year depreciation. I don't know much
> about taxes and thought it would help me to pay less, but
> when I plugged in the numbers I saved $45 dollars for the
> first year. Does that sound right? I really did not need a
> new computer and if I had known that this is all, I could
> have waited another year or so. I'm using taxact software.
> Thank you.

The $45 amount is right if you placed the computer in
service in the 4th quarter of the year, the depreciation
rate for the first year is 5% ($900 x 5% = $45).

You may instead be able to deduct the cost as a section 179
deduction. There are some requirements, such as the computer
must be used at least 50% for business. You can get more
info from Publication 946.

Rudy
www.LizcanoTaxServicesLLC.com

Disclaimer: The posted answer is for educational purposes
only and Lizcano Tax Services, LLC and/or Rodolfo Lizcano
have not been engaged to render any tax, accounting, legal,
or other professional services.

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

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