business profit taxes purposes

i think i got this straight, it's been a few years since my last business class. here it goes.

made from clients $1,000
cpu crashed had to replace cost $1,200

so if this is all i did all year then my tax statement for the year would show i lost $200

i think the techincaly term is the profit statemnt or something like that, good thing i am researching all this before i actually get my part time business off the ground, sorry for the dumb question, just want to make sure i am right when it comes to taxes and the govt.

Have a chat with your accountant. In the scenario you gave, you might actually depreciate your computer over (say) 3 years, so you might show a profit of $600 (1000-400) this year, and carry forward the remaining $800 in expense for the remainder of the computer for the next 2 years.

Dave

That's an expensive CPU! You sure you don't mean "Your PC" ?

The above poster is correct regarding depreciation.

I'm not an accountant, but I think there is also the fact of how you are using the PC/Mac. I think you can only write it off as a business expense if it is used exclusively for your photography. Otherwise, you would need to break out the percentage of time that you use it for your business and seperate it from recreational stuff like adult material