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How Do I Figure Out if I Deduct All or Part of My New Computer?

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Q: How do I figure out if I deduct all or part of my new computer?

A:Some of the most frequently asked questions we receive are about deductions. And when it comes to bloggers, how to deduct technology, like cell phones, tablets, and computers is at the top of the list. That makes sense, because your phone, camera, cell phone and computer are at the heart of how you get your posts written and your work done.

So how do you figure out if you can deduct that computer? And if so, how much?

IRS Publication 529 (2014) gives us all the details on Miscellaneous Deductions, but here’s the general idea.

First, you need to establish that computer is necessary or a convenience to completing your work. You’re a blogger, so that’s pretty easy to establish- without it, you’re not going to get your blog posts up very easily.

Second, you’ll have to figure out what depreciation method you should use. That depends on whether you meet the “more-than-50%-use test”.

According to the IRS Publication 529 (2014):

“…You meet this test if you use the computer more than 50% in your work. If you meet this test, you can claim accelerated depreciation under the General Depreciation System (GDS). In addition, you may be able to take the section 179 deduction for the year you place the item in service.”

…If you do not meet the more-than-50%-use test, you are limited to the straight line method of depreciation under the Alternative Depreciation System…”

 

Have more questions regarding technology deductions? Looking for more tax tips for bloggers? You’ve come to the right place. Check out our FREE Taxes & Accounting for Bloggers 101. You’ll find useful tips and ideas on making your blog finances a breeze. Still have questions or want to hire an expert? We can help with that too.

Check out our other Tax & Accounting FAQs for bloggers here:

What is the biggest tax mistake bloggers make?

How do I figure out if I deduct all or part of my new computer?

If I have an LLC, must I pay for all my business expenses with my business account?

Can I count digital products I give away for review as expenses?

What can I deduct for this blog conference? Are clothes deductible?

What is the best way to keep track of the little expenses that add up over the year?

What potential business expenses might I have as a blogger?

What do you suggest bloggers do when given free stuff as compensation?

What percentage of my work time do you recommend I spend on accounting?

 

Ben Sutton

Ben Sutton

Ben Sutton is the founder of Mazuma USA, an accounting firm providing tax, bookkeeping and payroll services to small businesses. Since founding Mazuma, Ben has established himself as an expert in the small business world. He’s still driven by that same desire to provide accounting help to all small businesses – from photographers, bloggers and creatives to lawyers, doctors, and dentists, everyone needs affordable accounting help. Ben is a Certified Public Accountant, and a member of the American Institute of Certified Public Accountants. But Ben considers his greatest achievement and credential to be his happy wife and four children.

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