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Old 12-24-2016, 08:51 PM
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Schedule C: Supplies vs Office Expenses vs Depreciation

I read that instead of depreciating low value office items such as hard drives, printers, keyboards, mice, etc. costing less than $200 (per item), it's possible to deduct these items as an expense under Supplies (line 22) even if their usefulness extends substantially beyond a year; is that correct? I hope so cause it seems ridiculous to depreciate a $60 hard drive.

Also, what's the difference between Supplies (line 22) and Office Expenses (line 18)? Could you list some common examples of each? Last year, our professional tax preparer put a bunch of stuff under Office Expenses that, based on my reading, probably should have been placed under Supplies. Then again, much of the information I've come across is contradictory, so I can't be sure.



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Old 12-25-2016, 11:14 AM
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I read that instead of depreciating low value office items such as hard drives, printers, keyboards, mice, etc. costing less than $200 (per item), it's possible to deduct these items as an expense under Supplies (line 22) even if their usefulness extends substantially beyond a year; is that correct? I hope so cause it seems ridiculous to depreciate a $60 hard drive.========>I guess it depends; your biz doesn?t depreciate all assets. Low-cost items or items that aren?t expected to last more than ONE YEAR are recorded in expense accounts rather than asset accounts. For example, office supplies are expense items and not depreciated, but that office copier, which you?ll use for more than ONE YEAR, is recorded in the books as a fixed asset and depreciated each year.

Also, what's the difference between Supplies (line 22) and Office Expenses (line 18)? Could you list some common examples of each? Last year, our professional tax preparer put a bunch of stuff under Office Expenses that, based on my reading, probably should have been placed under Supplies. Then again, much of the information I've come across is contradictory, so I can't be sure.=====> It's important to distinguish office expenses from supplies for tax purposes and also to properly analyze the various costs to your business over the year. The IRS makes a distinction between supplies and expenses. Supplies are tangible items that are part of normal, everyday business costs, and include items such as paper clips,drinking water, pens, candies for clients, ink, pens and mailing supplies. Expenses, by contrast, are typically not tangible supplies; instead, these are costs associated with running the business. Think of office expenses as the costs that are not part of your everyday use of tangible supplies. These include utilities such as phone, heating and electricity. Even if your office is run from your home, you can still count utilities on your taxes. Office expenses also include improvement purchases such as new carpets, lighting and paint. In addition, if you purchase new equipment like a printer or computer, or new furniture like a desk and chair, you can include those purchases in your office expenses



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