Tax Section 179 Deduction
October 30th, 2008If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!
Question: Tax Deduction Section 179, take the entire deduction now instead of over a few years, its for a computer,?
The computer cost about 25% of what I actually brought in this last year. I’d like the entire deduction, but will that cause issues in the future?
Answer: It’s really your choice. I realize you’re trying to minimize your self employment tax. You can take it all now as a 179, or you can elect a portion of it as 179 and depreciate the balance so you still have at least a small deduction for years. If you take it all this year you lose deductions in subsequent years – leaving yourself with less deductions to help lower your SE tax. No it won’t cause any issues in the future except that if you replace it in a few years you’ll have more depreciation to recapture because you accelerated the process. Also I should mention since it seems this is a side business based on the income this computer is listed property and must be used for business more than 50% of the time to qualify for a 179.
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