How do you guys handle smaller but durable tools? IRS says that any tool that should last more than one year must be depreciated rather than expensed. Section 179 allows rapid depreciation (read expensing) up to a rather large total based on income. I really seems a pain to have to list and fill out a depreciation sheet on a $50 drill or attachment. It looks like most tools of this type fall into a 7 year schedule. I looked at mine and I had about 2000 for 25 items in small and medium tools last year.
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There are several options.
One is that equipment less than a "minimum amount" is treated as a current expenses.
I have seen numbers anywhere from $250 to $1000. Possible even larger for larger companies.
Another option is to group a number of "like" items and treat them as one.
Thanks, I am using Turbo Tax Deluxe and I have not found the right way to do what I am wanting to do. The IRS help minion said there was no minimum amount, that it was a function of lasting over a year. While some here would argue that I should not expect my load of yellow stuff to last longer than that I am sure they will.
The only real effect is I believe they would expect you to keep records into out-years to recapture if sold off or traded. I can see it for a table saw, band saw etc but the small stuff that wears out/gets ripped off does not merit keeping any real history on. I think I will set my convention at $200 and expense it, over that 179 it. All the IRS Pubs and directions seem to point to bigger equipment. Sad thing is I have a degree in accounting that is sadly out of date. It should not make any real difference since I am not anywhere near my 179 limit. I just do not want to raise any undue flags.
Ras
You think Turbo Tax is worththe hassle?
Thats what we used this year and it seemed to take a long time vs using H&R Blocks software withthem figuring all the stuff out after the blanks were filled in.
They actually did a decent job for us last year.
Any comment?
Be taxation without representation......hmmmmm
andy"My life is my practice"
"You think Turbo Tax is worththe hassle?
Thats what we used this year and it seemed to take a long time vs using H&R Blocks software withthem figuring all the stuff out after the blanks were filled in."
Andy,
TT is a PITA the first time (year) you use it, after that it gets better, as it imports in prior year('s) info.
We've switched between TT and Tax Cut back and forth. Like TT better. BUT, in this day and age, the IRS should make available a similar product for free. Just my 2 cents.
Jon
Sorry I did not see your reply til today. It did not send an email and I missed it. I have used TT for a good many years. I think I do not like this years version too much. I could not get rid of some things and had to override to make it work. I had put in my truck just for mileage and it would not let me dump it off the depreciation sheets. Had to zero it to make it work. I skipped using them last year and had to put everything in but it was not too bad. I do not like the printing options, it still prints a bunch of extras even when you tell it not to, but not a big deal. I did use Tax cut once but at the time liked TT better. By and large it is not bad for $29 though.
Do you think that GM tracks the depreciation of every $100 office chair or $20 waste basket?
You know a $7.95 stapler has a life time of much more than a year. As does a $3 scew driver unless you lose them often.
Do you think that GM tracks the depreciation of every $100 office chair or $20 waste basket?
I worked for them until a couple of years ago. In general, the expense anything less than $2000. And in general, they "discuss" (sometimes ad infinitum) items between 2K and 2500, until they decide to expense them too. Above that they capitalize/amortize, unless they can find a way to lease the stuff cheaper.
Unless you're the lead dog, the view just never changes.
I finally found the right worksheet to list all the 179 stuff. Still had to override a couple of things. Got it all in the mail today. Got $450 credit towards next years estimated.
I really can not blame larger companies for tracking even to the anal side, the pot you watch doesn't boil over or something like that.
Thanks
A large number of my tools NEED to be purchased for one particular job. That makes them COGS. If I happen to use it again, so much the better. I'll be making porofit on it that they can tax me on.
I use section 179 for anything less than a thousand bucks though to simplify life. That's why it is there for us.
Welcome to the
Taunton University of Knowledge FHB Campus at Breaktime.
where ...
Excellence is its own reward!
Dear Sirs:
I am responding to your letter denying the deduction for two of
the three dependents I claimed on my 1994 Federal Tax return.
Thank you. I have questioned whether or not these are my
children for years. They are evil and expensive. It's only
fair that, since they are minors and no longer my
responsibility, the government should know something about them
and what to expect over the next year.
Please do not try to reassign them back to me next year and
reinstate the deductions. They are yours!
The oldest, Kristen, is now 17. She is brilliant. Ask her!
I suggest you put her to work in your office where she can
answer people's questions about their returns. While she has no
formal training, it has not seemed to hamper her mastery of any
subject you can name. Taxes should be a breeze.
Next year she is going to college. I think it's wonderful that
you will now be responsible for that little expense. While you
mull that over, keep in mind that she has a truck. It doesn't
run at the moment, so you have the choice of appropriating some
Department of Defense funds to fix the vehicle or getting up
early to drive her to school.
Kristen also has a boyfriend. Oh joy! While she possesses all
of the wisdom of the universe, her alleged mother and I have
felt it best to teach her the virtues of abstinence, or in the
face of overwhelming passion and ignoring us, safe sex.
This is always uncomfortable, and I am quite relieved you will
be handling this in the future. May I suggest that you
reinstate Dr. Jocelyn Elders who had a rather good handle on the
problem.
Patrick is 14. I've had my suspicions about this one.
His eyes are a little closer together than those of normal
people. He may be a tax examiner himself one day, if he is not
incarcerated first.
In February, I was awakened at three in the morning by a police
officer who was bringing Pat home. He and his friends were
toilet papering houses. In the future, would you like him
delivered to the local IRS office or to Ogden, UT?
Kids at 14 will do almost anything on a dare.
His hair is purple. Permanent dye, temporary dye, what's the
big deal? Learn to deal with it. You'll have plenty of time,
as he is sitting out a few days of school after instigating a
food fight in the cafeteria.
I'll take care of filing your phone number with the vice-
principal. Oh yes, he and all of his friends have raging
hormones. This is the house of testosterone, and it will be
much more peaceful when he lives in your home.
DO NOT leave him or his friends unsupervised with girls,
explosives, inflammables, inflatables, vehicles, or telephones.
(They find telephones a source of unimaginable amusement.
Be sure to lock out the 900 and 976 numbers!)
Heather is an alien. She slid through a time warp and appeared
as if by magic one year. I'm sure this one is yours.
She is 10 going on 21. She came from a bad trip in the sixties.
She wears tie-dyed clothes, beads, sandals, and hair that looks
like Tiny Tim's. Fortunately, you will be raising my taxes to
help offset the pinch of her remedial reading courses.
"Hooked On Phonics" is expensive, so the school has dropped it.
But here's the good news! You can buy it yourself for half the
amount of the deduction that you are denying me! It's quite
obvious that we were terrible parents (ask the other two).
She cannot speak English. Most people under twenty understand
the curious patois she fashioned out of valley girls/boys in the
hood/reggae/yuppie/political double speak.
The school sends her to a speech pathologist who has her roll
her r's. It added a refreshing Mexican/Irish touch to her
voice. She wears hats backwards, baggy pants, and wants one of
her ears pierced four more times.
There is a fascination with tattoos that worries me, but I am
sure that you can handle it.
Bring a truck when you come to get her, she sort of "nests" in
her room, and I think that it would be easier to move the entire
thing than find out what it is really made of.
You denied two of the three exemptions, so it is only fair that
you get to pick which two you will take. I prefer that you take
the youngest two; I will still go bankrupt with Kristen's
college, but then I am free!
If you take the two oldest, then I still have time for
counseling before Heather becomes a teenager. If you take the
two girls, then I won't feel so bad about putting Patrick in a
military academy.
Please let me know of your decision as soon as possible, as I
have already increased the withholding on my W-4 to cover the
$395 in additional tax and made a down payment on an airplane.
Yours truly,
Bob
Note: The IRS allowed the deductions and reinstated his refund.
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