Maybe that accountant was worth the $800 after all !

April 13, 2010 9:36 AM

Hope me with Turbo Tax.

This year, we decided to use Turbo Tax, despite the fact that I am clueless in these matters. It's going surprisingly well, but I want to make sure I'm doing the right thing. This past year, we spent around 11k on improvements to the gallery space...specifically a new cork/granite floor, and a gas fireplace. Turbo Tax wants to depreciate these items...is there a way to deduct them as an expense, as in "one fell swoop?" or is depreciation the only way?

posted by lobstah to Work & Money (6 answers total)

Accounting wise, you are asking about the difference between cash and accrual accounting. The article touches on the tax implications.
posted by nomisxid at 9:58 AM on April 13, 2010

IANACPA, but TT usually will recap those options for you; that is, whether you can take an accelerated depreciation or if it is a five year depreciation. There's a section of TT that reviews the options available under the current applicable laws. That may be after you've filled everything out on your business deductions schedule. If you own the building, too, you may have the option of a shorter or longer depreciation schedule. In my brief tenure as a landlord (many years past, now, thankgod) there were 3, 5, and 15 year depreciation schedules.

TT also offers an option to have your return reviewed by a real live person--less than the $800 for your CPA, but (from my experience at a tax software company) the people on the other end will provide their credentials, and at the company I worked for, many were CPAs & tax specialists. (I have no specific knowledge of TT, other than I've used it for about 8 years).

Further, irs.gov has answers to these sorts of questions, but iirc, a call to their hotlines resulted in about a Greenspan-like correctness ratio of 70/30.
posted by beelzbubba at 9:59 AM on April 13, 2010

You know, TurboTax itself has a forum for these kinds of questions.
posted by Jaltcoh at 10:06 AM on April 13, 2010

Also, The Bureau of National Affairs (bna.com), CCH (cch.com) and Research Institute of America (ria.com) all offer trial subscriptions to their tax library software. There is a wealth of information for the stressed out business owner that can be had for the price of a gmail account.
posted by beelzbubba at 10:08 AM on April 13, 2010

Best answer: You may be thinking of the Section 179 deduction. The 179 deduction allows you to deduct the full cost of qualifying equipment in the same year you purchased it up to a total of $250,000. Qualifying equipment is stuff like computers, office machines, office furniture, printing presses, machinery, etc. Unfortunately in your case, non-qualifying are real estate property or anything permanently attached to it like building improvements. So the floor and heating improvements generally would not qualify and would need to be depreciated. If you could argue that the modifications were for temporary showings or displays you might have a case, but probably not if you consider them permanent improvements.
posted by JackFlash at 10:26 AM on April 13, 2010

Response by poster: I think Section 179 is what I was thinking about. I should have figured that those things did not qualify. Thanks !
posted by lobstah at 12:04 PM on April 13, 2010