Computer and Taxes

[pbf98]

First off I'll start by saying I'm not sure where this topic should be, so if a guide or mod feels it would be better somewhere else feel free to move it

My girl friend's lappy is about shot, something has gotten into it that I haven't been able to find or get rid of. So I suggested upgrading ram, upgrade hdd to ssd, and update the os to 8 since she likes it. And said she might be able to claim it on taxes since she is a student, and personal computer is a needed for homework and online tests.

She being an accounting major is currently doing taxes and tells me you cannot claim parts to fix or add to a computer. My thoughts are opposite because of the fact that I can build a pc and claim it, and buying those three items are key components to a computer.

Also anyone ever hear of computer depreciation for taxes?

Can anyone shed some light? She doesn't like being wrong so I have to get sources if I am right haha

 

[lunatic59]

As with any asset for a business, a computer should be depreciated over it's life. I think the assumption is 5 years, but most will use section 179 of the tax code to expense the cost in one year (full deduction). As for repairs and parts, if it applies to an item that is being depreciated, those costs should be amortized over the remaining life of the asset. If the asset has already been expensed, then I would simply deduct them as maintenance. The thing is that all these deductions only apply to taxable income from a business or enterprise that these assets were used for.

Since being a student doesn't generate any income, then the requirement for a PC to complete her assignments can't be deducted from any other income she might have.

 

[pbf98]

Since being a student doesn't generate any income, then the requirement for a PC to complete her assignments can't be deducted from any other income she might have.

With this statement how are students allowed to claim a new pc, that I have heard has been done.

To me, maintenance of a pc by replacing parts and buying new could be fairly similar. In the instance of hers, it would virtually be a brand new computer to her, it would look different, and the newer components would help it run faster than it ever had.

Taxes are just so confusing. And for not knowing whether or not I'd get audited I did not claim my pc that I use to work from home when I can't make it into work. Everyone makes it seem like being audited is the worst thing that could happen.

I have heard you can file up to 3 years back, so would I be able to claim my pc next year if I were to choose to, having all my receipts?
Being a software developer I put the latest hardware into it, and it cost a pretty penny and it would be nice to get something back from it if at all possible.

 

[lunatic59]

With this statement how are students allowed to claim a new pc, that I have heard has been done.

It could be covered under education expenses like the cost of books, tuition or housing, but these tax credits would only be applicable to those paying the tuition.

To me, maintenance of a pc by replacing parts and buying new could be fairly similar. In the instance of hers, it would virtually be a brand new computer to her, it would look different, and the newer components would help it run faster than it ever had.

Except a PC is a registered asset while parts are only components of that asset. Depreciation begins when that asset is put in service in reference to the revenue generating activity. In any case section 179 will let you expense (I think it's up to $15,000 annually, but don't quote me on that) both the PC and the parts.

Taxes are just so confusing. And for not knowing whether or not I'd get audited I did not claim my pc that I use to work from home when I can't make it into work. Everyone makes it seem like being audited is the worst thing that could happen.

It's certainly not fun, but it's not the Spanish Inquisition, either. It's really just checking your math, unless you practice some creative accounting, there's usually nothing to worry about. And, the IRS makes mistakes, too. Several years ago, I got a letter from the IRS that I had failed to report some ridiculous amount of income (6 figures ... I WISH!). Anyway, I didn't have time to deal with it, so I called my lawyer who went over everything for me. He found that not only didn't I owe them anything, but I had an additional refund coming. Coincidentally his bill was almost the exact amount of that refund.

I have heard you can file up to 3 years back, so would I be able to claim my pc next year if I were to choose to, having all my receipts?
Being a software developer I put the latest hardware into it, and it cost a pretty penny and it would be nice to get something back from it if at all possible.

It is my understanding that you can delay filing, but you must be diligent in making sure all the proper forms are filed and your record keeping is meticulous. I've never done it, so I can't say one way or the other. I've always found it simpler to file for the calendar year on time and complete.