Great video. This is great. Question: Of course, as a graphic designer, a MacBook I use for business exclusively costs me $3100. So, does this mean I can only apply $2500?
Hi, Clarsen! Not silly at all - depreciation can be very confusing. If you're talking about a computer - or anything that costs less than $2,500 - it's actually easier to take advantage of the de minimis safe harbor election, which lets you write off the whole thing the first year.
How do I know how often I use my computer? How do I prove it? I'm a software engineer, and I want to write off a machine (GPUs for machine learning, etc.) I plan on purchasing for learning and development as I create a side business via an LLC I formed. Any ideas? Great video. You're really good at explaining things. I subscribed!
Hi Greg! There are a few ways to deduct your computer depending on your particular circumstances. This article should help you out! www.keepertax.com/posts/self-employed-computer-tax-deduction
Can you write off something that you used a credit line for ? And are still making payments on? Or does it have to be fully paid off? Mic / GoXLR setup. I want a new computer, debating how I should do this
Hi! Great question. Yes, business expenses paid for with a credit card are tax-deductible! There are some nuances to deducting a computer, though - you can learn more about those here: www.keepertax.com/posts/self-employed-computer-tax-deduction
If I’m starting a TH-cam channel and I’m buying a laptop and equipment specifically for that. Do I need to file for an LLC or sole proprietorship in order to write off my expenses or can I put it on my personal taxes
Hi Toni! You definitely don't need an LLC to expenses related to your TH-cam channel. You will be filing taxes as a sole proprietor, but that's actually a default status for self-employed people. You don't need to file apply for it or anything! What you'll do is fill out Form Schedule C when you do your taxes - this goes on your personal tax return. Best of luck growing your channel! Here are some resources that might help you out: An explainer on why an LLC isn't necessary to claim business write-offs: www.keepertax.com/posts/do-i-have-to-have-llc-to-deduct-business-expenses A step-by-step guide that walks you through filing taxes as a sole proprietor: www.keepertax.com/posts/how-to-file-self-employment-taxes-step-by-step An in-depth guide to Schedule C: www.keepertax.com/posts/schedule-c
Good question, Naseera! You don't have to use a dedicated business credit card - a mixed-use card is fine. Lots of freelancers and self-employed people rely on mixed-use cards for personal expenses, so there are no restrictions there
Awesome content! I need to buy a new computer, but I - my business- might not make $12 K this year (2022) which I understand is the automatic personal deduction/ exemption amount anyway? (So if you don't make more than 12K - you don't pay taxes yet?) So then in that case, the extra expensive of the computer won't reduce my 2022 taxes?- So should I buy before the end of 2022 or wait till 2023 to buy a computer? to get the most (if any) tax write off benefits? - Thanks!
Really good question, Lauren! So glad you asked - there are a few slightly complicated pieces at work here. It's true that the standard deduction reduces the amount of income tax you pay. So if you make less than the standard deduction, you don't end up paying income taxes at all. BUT, since you're a business owner, you're also on the hook for self-employment taxes. And that ISN'T reduced by the standard deduction. It's basically a flat 15.3% rate on all your business income, after $400. The good news is, you're allowed to claim business write-offs - like your computer - on top of the standard deduction. And that will reduce the amount of income you get taxed on, even if you're making under $12,000. Long story short, you can still get the tax benefit for 2022, since you can write off your computer to reduce your self-employment taxes on top of taking the standard deduction to element your income taxes. I know I just wrote you a whole novel! But if you still have questions, I've got this article that explains more: www.keepertax.com/posts/can-i-take-the-standard-deduction-and-deduct-business-expenses
What if you want to buy a MacBook pro and it costs $3000 plus tax, what do i to then? What about the price of the different software that will be needed after buying the laptop? How do i address those issues? I am a first year lyft driver, and i am considering starting a TH-cam channel. I am one month in as am independent contractor. How do i setup properly for taxes and write offs? Thank you.
For a MacBook Pro that costs $3,000, which is more than the de minimis safe harbor election, you can still claim the whole cost the year you buy it by treating it as a Section 179 asset! To do this, you'd have to use the computer for work more than 50% of the time and, because you're just starting out, you'll need to start using the it the year you buy it. As for software, you can write those off as separate expenses - not part of the cost of your laptop itself. Here's an article where you can learn more: www.keepertax.com/posts/software-tax-deduction
@KeeperTax I am driving for lyft right now but i may make a TH-cam channel so that I can use the MacBook full time as a write off . Do I launch it under an llc,or can I buy the MacBook now with a personal credit card, and write it off?
Fantastic channel!!! Question: Could you clarify Lines 14 and 15 on Schedule C - Employee Benefit Programs and Insurance? As someone who is self-employed, I've heard a myth(?) that I can write-off health insurance on line 14 and dental on line 15 as a self-employed sole proprietor. Is that right or is it a myth? If it's a myth, what would qualify to be written off under line 14 and 15?
Really good questions, Barnabas! What you heard isn't completely a myth - as a self-employed person, you can definitely get a tax break for your health and dental insurance! Instead, you'll put it on your Schedule 1 of your Form 1040 on line 17. This doesn't lower your self-employment taxes the way a Schedule C write-off would - it just lowers your income taxes. You can read more about how this tax break works differently from most write-offs here: www.keepertax.com/posts/self-employed-health-insurance-deduction As far as what Schedule C lines 14 and 15 are for, line 14 is for people who need to report health insurance, disability, and other forms of insurance they pay for for W-2 employees! And line 15 is for other forms of business insurance, like liability insurance.
Hi Elliot, good question. The IRS no longer considers computers "listed property," which is property used for both business and personal purposes for which taxpayers had to keep super detailed logs of their usage. What this means is that you no longer have to log when you're using your computer for laptop for business purposes, hour by hour, for "proof." You can take a reasonable estimate. This might be based on your working hours. For example, say you work from 9-to-5 from Monday to Friday, for 40 hours a week. But you're awake from 7 AM to 11 PM - 16 hours a day, or 112 hours a week. You could take 40 / 112 = 36% as your estimated business-use percentage.
Having an LLC, by itself, won't necessarily help you out with your taxes - it gets taxed just like a sole proprietorship by default! If your new business isn't bringing in any money yet, it may make sense to hold off on making business purchases like a new work laptop. That way, you can use its cost to offset your income in future years, when you're earning more.
What if you buy the PC in parts and create videos/media during the building process? The PC being built will be used exclusively for business/content creation as well but this, I think, would fall under two different categories wouldn't it? The overall build cost of the components in this example is ~$4200 but no individual component costs more than $1600. Since this is used both as marketing material/actual content for the business, does this change which category this would be in and/or would the entire amount be able to be written off all at once?
Really good question (and sounds like an awesome project and video)! You can go ahead and write off the entire amount you spend on your build components - no need to depreciate. As for Schedule C category, you've got a few options, including Box 18 (Office expenses) and Box 22 (Supplies). Luckily, the IRS is quite flexible when it comes to which Schedule C category you choose for each deductible expense - it gets that a given expense might make sense in multiple categories! As long as you stick to one and don't double-count it, you'll be okay.
I use editing software that cost $400-500 a year, where in my tax forms do I put that expense under? And is it that I get to deduct those $500. So if my taxable income is $5,500, after that deduction of that editing software. My taxable income will lower to $5,000. Is that right?
I have Keeper Tax and am trying to find a place to write off my computer, but there's no where to write it off online. I was told it would have a section for capital expenses, but it doesn't. What do I do?
Hi, Rebecca! If you go to the "Tax Help" tab in the Keeper app, you'll be able to chat with a tax assistant who can hep you out. Thanks for trying out the app!
@@KeeperTax Unfortunately the support team confirmed that there is no option to write off your computer on Keeper Tax. Might be good to let people know that, and where they should be filing their taxes.
@@paulkoullick6029 Wow ok, that’s so odd because the “tax expert” said not to do that. So basically I can ignore this video, no depreciation forms or anything is necessary?
Hi! Great question. According to the IRS, you should be able to use depreciation to deduct the business-use percentage of your computer - you'll just need to calculate its approximate market value at the time you started using it for business. Learn more here: www.keepertax.com/posts/self-employed-computer-tax-deduction And here's the related IRS guide! www.irs.gov/publications/p946
@@KeeperTax I am confused about this answer. I bought a computer in November of 2021 but did not use it until 2022 where I used it to build my online business. I understand I have to use depreciation to deduct it in 2022 at the market value of when I put it into use, but am I allowed to use bonus depreciation to take 100% of that market evaluation, or do i need to still depreciate it over 5 years? Everything I see online does not explain if bonus depreciation or section 179 work with items that were acquired in a previous year while being put into use in the current year I'm filing for.
@@braydensfinds Great question! Unfortunately, bonus depreciation and section 179 only apply to equipment that's new to you (even if you bought it secondhand). In the situation you described, you'll want to depreciate it over five years.
If you have more questions about writing off your computer, we're happy to answer! You can actually download our app and chat with a tax assistant directly. (There's a free trial, so you can see if you find it helpful before you commit!) If you're curious, get started here: keeper.tax/e/sxOB5ACs5pb
Hey, Daniel! For computers that cost more than $2,500, you can still write off its entire cost the year you bought it using "bonus depreciation." (This applies to the business-use percentage of the computer. So it'd be 100% of you bought it as a work-only machine!)
@@deeznuttzzz4745 Yes, exactly! Bonus depreciation lets you do that. (The "bonus" basically means that, even though you'd normally spread it out over five years, you're able to take it all at once.)
![fellow fellow - พรุ่งนี้ไม่มีใครรู้ feat. INK WARUNTORN [OFFICIAL MV]](http://i.ytimg.com/vi/QP6JyjYx_W0/mqdefault.jpg)
![Everyday Tax Write Offs for Small Businesses! [24 hr Challenge]](/img/n.gif)
Great video. This is great. Question: Of course, as a graphic designer, a MacBook I use for business exclusively costs me $3100. So, does this mean I can only apply $2500?
Omg thanks for posting this because I’ve needed to upgrade, but wasn’t sure if I could write it off
Tyra, you are INFECTIOUS! Oh, and thanks for the information. I hope Keeper, keeps, you!
Hello, thank you for your video I jus have a quick question might be a silly one. so for Depreciation is it better to use MARCS 200% for depreciation?
Hi, Clarsen! Not silly at all - depreciation can be very confusing. If you're talking about a computer - or anything that costs less than $2,500 - it's actually easier to take advantage of the de minimis safe harbor election, which lets you write off the whole thing the first year.
You guys are a keeper
We're so glad you think so!
How do I know how often I use my computer? How do I prove it? I'm a software engineer, and I want to write off a machine (GPUs for machine learning, etc.) I plan on purchasing for learning and development as I create a side business via an LLC I formed. Any ideas? Great video. You're really good at explaining things. I subscribed!
Hi Greg! There are a few ways to deduct your computer depending on your particular circumstances. This article should help you out! www.keepertax.com/posts/self-employed-computer-tax-deduction
Can you write off something that you used a credit line for ? And are still making payments on? Or does it have to be fully paid off? Mic / GoXLR setup. I want a new computer, debating how I should do this
Hi! Great question. Yes, business expenses paid for with a credit card are tax-deductible! There are some nuances to deducting a computer, though - you can learn more about those here: www.keepertax.com/posts/self-employed-computer-tax-deduction
If I’m starting a TH-cam channel and I’m buying a laptop and equipment specifically for that. Do I need to file for an LLC or sole proprietorship in order to write off my expenses or can I put it on my personal taxes
Hi Toni! You definitely don't need an LLC to expenses related to your TH-cam channel. You will be filing taxes as a sole proprietor, but that's actually a default status for self-employed people. You don't need to file apply for it or anything! What you'll do is fill out Form Schedule C when you do your taxes - this goes on your personal tax return.
Best of luck growing your channel! Here are some resources that might help you out:
An explainer on why an LLC isn't necessary to claim business write-offs: www.keepertax.com/posts/do-i-have-to-have-llc-to-deduct-business-expenses
A step-by-step guide that walks you through filing taxes as a sole proprietor: www.keepertax.com/posts/how-to-file-self-employment-taxes-step-by-step
An in-depth guide to Schedule C: www.keepertax.com/posts/schedule-c
Do I have to purchase it using my business credit card or can I use my personal?
Good question, Naseera! You don't have to use a dedicated business credit card - a mixed-use card is fine. Lots of freelancers and self-employed people rely on mixed-use cards for personal expenses, so there are no restrictions there
Awesome content! I need to buy a new computer, but I - my business- might not make $12 K this year (2022) which I understand is the automatic personal deduction/ exemption amount anyway? (So if you don't make more than 12K - you don't pay taxes yet?) So then in that case, the extra expensive of the computer won't reduce my 2022 taxes?- So should I buy before the end of 2022 or wait till 2023 to buy a computer? to get the most (if any) tax write off benefits? - Thanks!
Really good question, Lauren! So glad you asked - there are a few slightly complicated pieces at work here.
It's true that the standard deduction reduces the amount of income tax you pay. So if you make less than the standard deduction, you don't end up paying income taxes at all. BUT, since you're a business owner, you're also on the hook for self-employment taxes. And that ISN'T reduced by the standard deduction. It's basically a flat 15.3% rate on all your business income, after $400.
The good news is, you're allowed to claim business write-offs - like your computer - on top of the standard deduction. And that will reduce the amount of income you get taxed on, even if you're making under $12,000.
Long story short, you can still get the tax benefit for 2022, since you can write off your computer to reduce your self-employment taxes on top of taking the standard deduction to element your income taxes.
I know I just wrote you a whole novel! But if you still have questions, I've got this article that explains more: www.keepertax.com/posts/can-i-take-the-standard-deduction-and-deduct-business-expenses
@@KeeperTax OH WOW! Thanks -- You are so AWESOME! - Thanks.
What if you want to buy a MacBook pro and it costs $3000 plus tax, what do i to then? What about the price of the different software that will be needed after buying the laptop? How do i address those issues? I am a first year lyft driver, and i am considering starting a TH-cam channel. I am one month in as am independent contractor. How do i setup properly for taxes and write offs? Thank you.
For a MacBook Pro that costs $3,000, which is more than the de minimis safe harbor election, you can still claim the whole cost the year you buy it by treating it as a Section 179 asset! To do this, you'd have to use the computer for work more than 50% of the time and, because you're just starting out, you'll need to start using the it the year you buy it.
As for software, you can write those off as separate expenses - not part of the cost of your laptop itself. Here's an article where you can learn more: www.keepertax.com/posts/software-tax-deduction
@@KeeperTax thank you.
@KeeperTax I am driving for lyft right now but i may make a TH-cam channel so that I can use the MacBook full time as a write off . Do I launch it under an llc,or can I buy the MacBook now with a personal credit card, and write it off?
Thank you ❤️.
Thank you for watching, Kyla!
Fantastic channel!!! Question: Could you clarify Lines 14 and 15 on Schedule C - Employee Benefit Programs and Insurance? As someone who is self-employed, I've heard a myth(?) that I can write-off health insurance on line 14 and dental on line 15 as a self-employed sole proprietor. Is that right or is it a myth? If it's a myth, what would qualify to be written off under line 14 and 15?
Really good questions, Barnabas! What you heard isn't completely a myth - as a self-employed person, you can definitely get a tax break for your health and dental insurance! Instead, you'll put it on your Schedule 1 of your Form 1040 on line 17. This doesn't lower your self-employment taxes the way a Schedule C write-off would - it just lowers your income taxes. You can read more about how this tax break works differently from most write-offs here: www.keepertax.com/posts/self-employed-health-insurance-deduction
As far as what Schedule C lines 14 and 15 are for, line 14 is for people who need to report health insurance, disability, and other forms of insurance they pay for for W-2 employees! And line 15 is for other forms of business insurance, like liability insurance.
@@KeeperTax Fantastic. Thank you so much!
Great video!! 👏😀
Thanks for watching, Kenneth!
How are you dictating your amount of usage????
Can you go into more depth on how you can prove this or what they are looking for?
Hi Elliot, good question. The IRS no longer considers computers "listed property," which is property used for both business and personal purposes for which taxpayers had to keep super detailed logs of their usage.
What this means is that you no longer have to log when you're using your computer for laptop for business purposes, hour by hour, for "proof." You can take a reasonable estimate. This might be based on your working hours. For example, say you work from 9-to-5 from Monday to Friday, for 40 hours a week. But you're awake from 7 AM to 11 PM - 16 hours a day, or 112 hours a week. You could take 40 / 112 = 36% as your estimated business-use percentage.
Im trying get that new macbook i have an llc from 2022 that dint earn any money how can i claim that macbook on taxes
Having an LLC, by itself, won't necessarily help you out with your taxes - it gets taxed just like a sole proprietorship by default! If your new business isn't bringing in any money yet, it may make sense to hold off on making business purchases like a new work laptop. That way, you can use its cost to offset your income in future years, when you're earning more.
@@KeeperTax thanks
What if you buy the PC in parts and create videos/media during the building process? The PC being built will be used exclusively for business/content creation as well but this, I think, would fall under two different categories wouldn't it? The overall build cost of the components in this example is ~$4200 but no individual component costs more than $1600. Since this is used both as marketing material/actual content for the business, does this change which category this would be in and/or would the entire amount be able to be written off all at once?
Really good question (and sounds like an awesome project and video)! You can go ahead and write off the entire amount you spend on your build components - no need to depreciate. As for Schedule C category, you've got a few options, including Box 18 (Office expenses) and Box 22 (Supplies). Luckily, the IRS is quite flexible when it comes to which Schedule C category you choose for each deductible expense - it gets that a given expense might make sense in multiple categories! As long as you stick to one and don't double-count it, you'll be okay.
@@KeeperTax awesome, thank you so much for the reply!
I use editing software that cost $400-500 a year, where in my tax forms do I put that expense under? And is it that I get to deduct those $500. So if my taxable income is $5,500, after that deduction of that editing software. My taxable income will lower to $5,000. Is that right?
Hi! Yes, that's exactly right re: deductions. Software expenses will generally go on Box 18 of your Schedule C.
I have Keeper Tax and am trying to find a place to write off my computer, but there's no where to write it off online. I was told it would have a section for capital expenses, but it doesn't. What do I do?
Hi, Rebecca! If you go to the "Tax Help" tab in the Keeper app, you'll be able to chat with a tax assistant who can hep you out. Thanks for trying out the app!
@@KeeperTax Unfortunately the support team confirmed that there is no option to write off your computer on Keeper Tax. Might be good to let people know that, and where they should be filing their taxes.
@@rebeccakirsh Oh no! That must have been a misunderstanding. You can safely categorize it as "supplies" in the app.
@@paulkoullick6029 Wow ok, that’s so odd because the “tax expert” said not to do that. So basically I can ignore this video, no depreciation forms or anything is necessary?
@@paulkoullick6029 To clarify, this computer cost over $3000… so I thought depreciation was a requirement. Is that not true?
Hi quick question. I bought my computer 2 years ago for $6,500.00. I use this computer for work 80% of the time. Can I write off the total amount? 😢
Hi! Great question. According to the IRS, you should be able to use depreciation to deduct the business-use percentage of your computer - you'll just need to calculate its approximate market value at the time you started using it for business.
Learn more here: www.keepertax.com/posts/self-employed-computer-tax-deduction
And here's the related IRS guide! www.irs.gov/publications/p946
@@KeeperTax I am confused about this answer. I bought a computer in November of 2021 but did not use it until 2022 where I used it to build my online business. I understand I have to use depreciation to deduct it in 2022 at the market value of when I put it into use, but am I allowed to use bonus depreciation to take 100% of that market evaluation, or do i need to still depreciate it over 5 years? Everything I see online does not explain if bonus depreciation or section 179 work with items that were acquired in a previous year while being put into use in the current year I'm filing for.
@@braydensfinds Great question! Unfortunately, bonus depreciation and section 179 only apply to equipment that's new to you (even if you bought it secondhand). In the situation you described, you'll want to depreciate it over five years.
huh?
If you have more questions about writing off your computer, we're happy to answer! You can actually download our app and chat with a tax assistant directly. (There's a free trial, so you can see if you find it helpful before you commit!) If you're curious, get started here: keeper.tax/e/sxOB5ACs5pb
what about if the computer its more than $2,500??
Should be able to write off upbto 25000
Hey, Daniel! For computers that cost more than $2,500, you can still write off its entire cost the year you bought it using "bonus depreciation." (This applies to the business-use percentage of the computer. So it'd be 100% of you bought it as a work-only machine!)
Deducted it all at once and not the over the years stuff
@@deeznuttzzz4745 Yes, exactly! Bonus depreciation lets you do that. (The "bonus" basically means that, even though you'd normally spread it out over five years, you're able to take it all at once.)
@@KeeperTax to do bonus depreciation, you opt out of special depreciation? Or is special depreciation another term for bonus depreciation?
Literally answered alll of my questions in one video thank you!!!! 🤍
Thanks for watching!