That expensive computer you just bought could be tax deductible. It all depends on how you use it.

Here’s how to deduct computers on your taxes.

Can students deduct the cost of a computer?

You get no deduction for a computer you use to help you with your school work. Sorry. The same goes for books and other school supplies. Just one more reason being a student sucks.

Can an employee deduct a computer?

No, tax reform changed the rules around unreimbursed employee expenses.

You’ll be better if you can get your employer to reimburse you for the cost of a computer. The employer will then be able to deduct the cost as a business expense. You don’t have to include the reimbursement as employee income because you’re using it for work.

Can I deduct a computer for my business?

Yes, the self-employed can deduct the cost of a business computer. The same goes for any other business equipment you buy.

How to deduct the cost of a computer

There are several ways to deduct the cost of a computer. Usually, you can deduct the entire depreciable cost in a single year instead of depreciating it over five years.

Can you deduct the entire cost of a computer?

Yes, you can use de minimis safe harbor to deduct the cost of a computer under $2,500. If it’s more, you may have to use the Section 179 deduction.

When do you have to depreciate the cost of a computer?

If you can’t use the de minimis safe harbor to deduct the cost of a computer in a single year, you’ll likely be able to deduct the deduct the entire cost under a provision of the tax law called Section 179.

Under Section 179, you can deduct in a single year the cost of tangible personal property (new or used) that you buy for your business. This includes computers, business equipment, machinery and office furniture. To take advantage of Section 179, you must use the computer in your business more than 50 percent of the time.

If you use the computer for both business and personal purposes (such as playing computer games), your deduction is reduced by the percentage of your personal use.

Stephen Fishman

Stephen Fishman

Stephen Fishman is a self-employed tax expert and regular contributor to MileIQ. He has dedicated his career as an attorney and author to writing useful, authoritative and recognized guides on taxes and business law for entrepreneurs, independent contractors, freelancers and other self-employed people. He is the author of over 20 books and hundreds of articles, and has been quoted in The New York Times, Wall Street Journal, Chicago Tribune, and many other publications. Visit Fishman Law and Tax Files for more information on his work.
Stephen Fishman