Hit: Income Tax: Computer Deduction (fwd)

[Connie J Booher <cjbooher@SACAM.OREN.ORTN.EDU>]

  This message is in MIME format.  The first part should be readable text,
  while the remaining parts are likely unreadable without MIME-aware tools.
  Send mail to mime@docserver.cac.washington.edu for more info.

--Boundary (ID UhBYreuDDCaqmzUxEy2hsw)
Content-Type: TEXT/PLAIN; CHARSET=us-ascii
Content-ID: <Pine.PMDF.3.91.960402230218.578709K@TEN-NASH.TEN.K12.TN.US>



Connie Booher
Traveling Media Center Technology Librarian
Knox County Schools
P.O. Box 2188
Knoxville, Tn.  37901

                        E-mail: cjbooher@sacam.oren.ortn.edu
                        Telephone: (423) 594-3830
                        Fax: (423) 494-3828



---------- Forwarded message ----------
Date: Tue, 02 Apr 1996 23:02:36 -0600 (CST)
From: booherc01@TEN-NASH.TEN.K12.TN.US
To: cjbooher@sacam.oren.ortn.edu
Subject: Hit: Income Tax: Computer Deduction (fwd)



Connie Booher                   Telephone: 424-594-3830
Library Services                Fax:  423-594-3828
Knox County Schools             E-mail:  booherc01@ten-nash.ten.k12.tn.us
Knoxville, Tennessee

---------- Forwarded message ----------
Date: Tue, 02 Apr 1996 22:53:08 -0800
From: Connie Booher <booherc01@TEN-NASH.TEN.K12.TN.US>
To: lm_net@listserv.syr.edu
Cc: booherc01@TEN-NASH.TEN.K12.TN.US
Subject: Hit: Income Tax: Computer Deduction

Thanks to all who responded to my question about deducting a computer off
of our income tax. I plan to write each of you individually and thank you
personally for taking the time to respond to my message.

I missed the discussion that this group had a few weeks ago concerning
reposting messages.  So I don't know what the final word was on
reposting.  I did not want to reveal anyone's identity, but I did want to
share the valuable information.  I stripped all names and addresses from
the responses.

Also, please keep in mind that these individuals are only passing on
advice.  They are not C.P.A.s.  However, you may want to share this
information with your tax preparer.
--
Connie Booher           Telephone: 423-594-3830
Library Services        Fax:   423-594-3828
Knox County Schools     E-mail: booherc01@ten-nash.ten.k12.tn.us
Knoxville, Tennessee    E-mail: cjbooher@sacam.oren.ortn.edu

--Boundary (ID UhBYreuDDCaqmzUxEy2hsw)
Content-Type: TEXT/PLAIN; CHARSET=us-ascii
Content-ID: <Pine.PMDF.3.91.960402230218.578709L@TEN-NASH.TEN.K12.TN.US>

Response #1
I would not want to get into the realm of giving legal advice but according
to my tax person -- and successful audits.  Just as you would deduct
professional books you can deduct a computer (but only to the % that it is
used for business).  90% = 90%; you must keep an accurate, at the time log,
of ALL use to verify your total use.

Response #2
I hope you post these answers or maybe people will just write in
themselves.  I have the same question, especially since I was in library
school last year and felt like I needed the computer to survive my
telecommunications class.  My tax guide says if there is a computer available
at work or school, you cannot deduct your own.
HOWEVER, I don't consider staying late at a crowded computer lab in the heart
of a city a safe or practical option.  Most teachers I know deduct it, so
I'll probably try it.  I'm working on the taxes right now (except for taking
this break!)

Response #3
My CPA deducted the full amount of my new system, $3700.00 this year.
You can decide on a level (90%) for you and deduct that amount, or
you can depreciate the value each year based upon use for business.
I also deduct conferences, books, subscriptions, on-line services,
ISP, etc.

Response #4
We have our taxes done by an individual every year who worked for H&R
BLock & then went independent. He's been doing this over 20 years. Here's
what he said when we had taxes done in Feb.
My husband asked the same ?? about our computer, which I purchased last
Sept. Mr. Lee had me explain how I used it at home. I said I had
specifically purchased a Mac since that's what we use at school so I
could transfer work, newsletters, etc. back & forth. I also have a modem
hooked up to TENET--which is the Texas Educational Network for strictly
for educators, administration, & students in Texas. I do not have AOL,
He asked how much of the time the computer was "on" was I using it for
work--not my kids for schoolwork, or my husband. We said probably about
75% of the time.
He said *IF* we were audited (which we would have ample warning of) we
would have to prepare a log of dates/times I was using the computer to
PROVE I was using it for work. We would also have to remove any games
that were on the computer, but could reinstall them later. He has a mega-
gig IBM computer with the whole set-up to do taxes on--he says he takes
it off of taxes every year, & he has a couple of games on his that he
would have to remove.

He asked what we paid for the computer set-up & prorated it to depreciate
over several years (I think 4). This was based on the 75% figure that we
first established. We could also take off the cost of the extra phone
line (since all I have is TENET & mainly subscribe to LM_NET), printer
ribbon, paper, & any programs I need to use at work (such as Print Shop
for my newsletters--which are required by the district).
Mainly you have to be able to provide a log of when & how much & for what
you used the computer & it sounds like this would be easy for you to do.
Ideally the log would be kept as you use it, but we all know NO ONE has
time like that! I guess now you need to find a tax consultant that agrees
with all this!
That's the problem with tax laws--if even the tax preparers can't agree!!

Response #5
Our local newspaper recently ran an article on this subject.  They
reported that if your place of business supplies you with a computer, and
doing your work at home on your own computer is really for your
convenience, i.e. you don't want to stay late at work to do it, then you
may NOT deduct the home computer.
If, however, your employer REQUIRES you to work from home, then you MAY
deduct the home computer.
I have teacher friends who said they've been advised by tax accountants
that they may at least write off depreciation on their home computers - I'm
not sure how it's figured and over how many years.
If you get a definitive answer, it would be helpful if you posted that
to the group.  It's a good question.  Sadly, I haven't had time to even
start my taxes yet this year, so I will be able to use whatever advise you
receive.

Response #6
Right On, Sister!
In my family, the new computer is used about 50/50.  When we finalized
our return, we decided my husband should claim it because he uses it for
his home-based business.  I could have claimed it on a 2106, but only if
we had enough deductions to use a Schedule A.
The business is the better deal, if that is your choice, because a
business expense has a greater effect on the entire return.

Response #7
I don't know the legality, but we *did* take
some hardware (don't remember whether it was a printer or a fax) off as
my professional expense.  I think that if I had listed it for our
accountants instead of lumping it all into Prof Expense, they would
have had us divide it over a couple of years or something like that.

I think they told us once that we would do "equipment" that way. I don't
know if my way was legal, but we didn't get checked on it.  I usually
have about $2000.00 professional expense -- education, conferences,
publications.

Response #8
I bought a laptop this year to use when I consult, and the
person with whom I checked (she has worked for H & R Block for years)
said I would have to take the depreciation over a five year period.  I
decided that was too much trouble.

Response #9
We think this comes under unreimbused employee expenses.  It is similar
to the use of your home or car for business purposes.  Keep looking in
the 1040 booklet for the right place to put it.  You can also call the
IRS and ask them where you list it. Do not ask them if you can list it.

Response #10
According to my old tax professor (IRS Appeals Officer - Tampa, FL), your
chance of being called in for an IRS audit increases dramatically whenever
you venture into the area of deductions related to personal property used for
work.
That, to me, is always the main trade-off in any tax issue: the little bit
you save this year vs. the legal right of the IRS to open up your returns
from the past three years (statute of limitations) if they find something
they don't like.
This is my own opinion and in no way reflects etc., etc.  :)

Response #11
I think many of us who do teacher/student training on computers and
software would like to know the answer to your question. If you didn't
have the hardware at home you would have to live at school in order to
learn the hard/software before trying to teach it to others.

Response #12
I too use my computer at home for school work both from my school I am
librarian at and because I am getting my Master's Degree in Library Science.
My accountant said I am to keep track of the time I use my computer per day
for school and college related work.  He them wrote the computer [% of use
which equaled 90 - 95%].  Even when I use America On line it is for school
related work.  My family members use my computer very little for games or
AOL communication.  My husband has CompuServe at work, so he uses his
computer at work [besides he likes DOS/Windows machines and I love Macs].
Please let me know what you hear from other librarians.  I would like to
know if my accountant is giving me the truth.  [My accountant does do my
taxes separetely from my husbands, because I am working on my Masters.]
Hope this helps you.













--Boundary (ID UhBYreuDDCaqmzUxEy2hsw)--