Writing off the iPad

A very specific question for my american tax expert friends

Finishing up the taxes, and the only big question I have is how to handle my iPad. I use it for a back up device, for my presentation, and take all my client notes on it. But I also use it for personal reasons -- games, movies on planes, personal email.

When I account for this asset, I can choose to write it down this year as an expense, or depreciate it. I would rather write it off, but I have to use it "100%" for business. Which I do, but it gets used for more.

I am always wary of the computer gear as a writeoff. Should I write it down, or depreciate it?

I am not a tax professional and I'd highly recommend you consult with a pro on this. You don't want to do anything that may raise a "flag."

I believe that how you handle this is dependant upon how you typically may depreciate or expense gear. If you use it a lot for other things - which you've stated is the case, then I don't see how could take 100% of it. You are probably entitled to a portion of it, but not all. This is where my tax guy is worth the money I pay him . That's the extent of my amateur tax expertise.

sapearl wrote in post #12008898
I am not a tax professional and I'd highly recommend you consult with a pro on this. You don't want to do anything that may raise a "flag."

I believe that how you handle this is dependant upon how you typically may depreciate or expense gear. If you use it a lot for other things - which you've stated is the case, then I don't see how could take 100% of it. You are probably entitled to a portion of it, but not all. This is where my tax guy is worth the money I pay him . That's the extent of my amateur tax expertise.

I actually opted to depreciate it as an asset. It would be hard for anyone to prove that they only use it for business. Its not worth the trouble.

I have been audited once before -- over a computer.

an iPad is considered a computer. In Canada you have 2 choices - depreciate it as an asset (which by the way is 50% in year 1 and 50% in year 2, under current tax rules for computer depreciation), or since it is less than $1000 write it off as an expense.

I'm using it as a business tool to download reference material (books) and also consistently use it as a portfolio for showing images of my work to clients. I will consult my tax person when I file and use these guidelines when I explain its use.

You use it for your business. It's okay.

I visited with a friend who is a CPA attorney today. He recommended against it. He said that writing off computers at 100%, autos, and home offices are all audit red flags.

mattograph wrote in post #12013262
I visited with a friend who is a CPA attorney today. He recommended against it. He said that writing off computers at 100%, autos, and home offices are all audit red flags.

Absolutely - I use a portion of my auto, but that's based upon what percentage of the total mileage is used for wedding and event work. He also factors in a small portion for maintenance and upkeep. Photography is my second job and the vehicle is used for other needs, so the amount is very modest.

I was told its 100% or nothing at all. If you are using it for personal use, you can't take the deduction. Same for home office, it has to be 100% business use. My CPA gave me an example of...If an auditor came to your home and saw that you only owned one computer and that was in the office, they are going to assume you use it for personal use as well which would kill the deduction. Told me that I need to have one computer outside of the office to be safe. I know thats the extreme but it does happen. Said it depends on the agent doing the audit whether they push the issue.

http://www.section179.​org/section_179_deduct​ion.html

Tigershark wrote in post #12018434
http://www.section179.​org/section_179_deduct​ion.html

Nice site. I think i need an accountant.

you know how to get in touch with me if you have any questions

mattograph wrote in post #12021234
Nice site. I think i need an accountant.

A good CPA is well worth his money - they keep up with the yearly tax code changes, nuances of the law as well as local changes. I'm happy to pay them a fair price for something in which I have no talent or interest. I much more enjoy photography .

Taking Sec. 179 depends on your income for the year. 179 can't put you in a loss, it can only make you break even. So only you'll know if you can take it or not.

Another option is Bonus Depreciation. It allows you to take 50% of the cost of the item as depreciation in the first year. However, Obama enacted a 100% bonus depreciation if the item was placed in service after September 8, 2010 (I'm not positive on the exact date but it's around the 8th sometime).

As far as the business % use goes, if it's used 100% for business then claim it as such on your return. As long as you can back up your claim if you do happen to get audited, you should have nothing to worry about. The likelyhood of the IRS auditing you over a $699 iPad is slim, unless there is something else on your return that raises a flag. The IRS does like to audit photography business's because most of the time they turn out to be nothing more than an operation to fund our hobby and take the losses on our returns.