Should You Claim Your Electronics on Your Taxes?
It’s tax time, which means it’s time to get super creative to maximize your return. Most of us have a ton of electronics that we paid beaucoup bucks for around the house. Wouldn’t it be awesome if you could claim those on your taxes? Well, the good news is some of it you can!
The key is that the electronic device you claim must be used at least 51% for work.
4 Things to Consider Before You Claim:
Do you gain a legitimate income using these devices?
It’s not just a matter of what percentage you use the device but whether you earn a significant income from the business you use it for. For instance, if you use your laptop 10 times a month and six of those times are business related, you’ve met part of the criteria. But if your business is producing a small percentage of your income, the IRS might not accept your claim.
Do you have receipts and usage logs?
In the event of an audit, it’s important that you can provide evidence of when you purchased the device and how much you spent on it. The government will also want proof that you’ve been using the device for work. If it’s a cell phone, you should be able to request call logs monthly from your provider. You should keep your business accounts up-to-date so you can prove any income or expenditures made that can show you’ve been using your devices for business.
Keep depreciation in mind.
You already have a receipt that shows when you purchased the device, and you’ve claimed how often you use it for personal vs. professional needs. Your best bet to avoid an audit is to claim the equipment based on its depreciated value. Use this online calculator to determine exactly what you should be claiming and keep your tush covered.
Don’t forget the little things.
You have no doubt claimed your computer, printer and cell phone; but don’t forget modems, USB cables and other equipment that keep everything up and running. All of these things add up to serious dollars over time. Just be sure you’ve kept receipts.
Taxes are painful, but you can ease the pain by being smart and creative with your tax deductions. When you’re ready to upgrade to a new electronic device, your best bet is to donate the old one and keep the receipt. That way, next year you’ll be able to claim the new equipment and the charitable donation!