Can I Write My Laptop Off on My Taxes?

Father and daughter looking at a laptop.
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Your laptop isn't deductible unless you use it to make money. If you're self-employed, you can deduct the price you pay for a new computer. If you use the computer to manage your investments, that's deductible, but only if you itemize. You can take an itemized deduction if you're an employee, provided your boss requires you to use the laptop for your job.

Section 179: The One-time Deduction

Normally you deduct the value of business equipment, such as computers, by depreciating it gradually, year after year. The Section 179 rule lets you deduct the entire cost the year you buy the laptop. You can also write off software purchases, provided the programs are off the shelf and available to the general public. If the laptop is also your personal computer, you must use it at least 50 percent for business to take Section 179. If, say, you use the laptop 80 percent for business, you can deduct 80 percent of the cost.

Depreciation: Deducting Over Time

The Internal Revenue Service sets limits on the 179 deduction. For example, you can't write off more than $500,000 in equipment expenses in a year, at the time of publication. You may decide it makes better tax sense to have a small deduction you take over several years than one lump sum. IRS Publication 946 covers the details on depreciation rates and methods, if you go that route. If you use the computer only partly for work, you take depreciation only on the work percentage.

Other Deduction Options

If you're an employee, you can deduct depreciation if your employer requires you to use a laptop for work. You can also write off depreciation if you use the computer to "produce income" -- investing online, say -- in the IRS' words. Unfortunately, the depreciation is a "2 percent deduction," like union fees and professional organization dues. You add all such expenses together -- excluding anything your employer reimbursed you for -- and deduct 2 percent of your adjusted gross income. What's left is all that's deductible.

Taking the Write-off

If you're self-employed, report the business use of your computer on Schedule C, the form for self-employment income. You report both depreciation and Section 179 purchases on Line 13 of the Schedule C form. You also have to fill out Form 4562. To take an employee or income-generating deduction, you have to itemize the amounts on Schedule A. If you take the standard deduction instead, there's no write-off.

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