Self-Employment Deductions: How to deduct the cost of a new computer on your taxes?

Do you utilise your personal computer, laptop, or desktop for work? Then, together with any operating expenses, you can deduct the part of the device’s drop in value (depreciation) that is related to your employment.

You’ll likely be eligible for an immediate tax deduction on any laptops or desktops purchased for business use.

Tax deductions on your new computer

Only the fraction of the cost that is used for business purposes may be deducted from the cost of the computer or laptop. To accomplish this, you must keep a diary for four weeks in order to develop a usage pattern.

Your accountant or tax expert can then assist you in allocating the proper sum and inform you of the records you must maintain to support your claim.

To be eligible for the deduction, the asset must be used by the end of the tax year (30 June). You must file a claim the next year if an item you order is delivered the following year.

Businesses having a turnover of less than $500 million will be able to fully utilise the Instant Asset Write-Off provisions beginning on July 1, 2023. However, this will only apply to items costing less than $1000.

You can deduct your internet fees and expenses for setting up and maintaining your computer as a small company owner in addition to the price of your computer.

Small business owners that operate their operations through a corporation are eligible for a 25% tax break. You receive tax reduction if you operate a business as a sole proprietor or partnership at your marginal rate (between 19% and 45%, minus the Medicare levy).

It’s a good idea to think about what you may and cannot claim given that the ATO has announced a major crackdown on higher-than-expected tax deductions. Experience matters when it comes to getting the most out of your tax return, all things considered.


https://www.marca.com/en/lifestyle/us-news/personal-finance/2022/10/02/633957abe2704ec6968b45ad.html