The nuances of writing a new laptop off as a tax expense.
January 29, 2013 7:36 PM Subscribe
If I quit my job in April and start working on my own projects, can I buy a new laptop in July and write it off as a work expense on my taxes, even though I might not actually make any money from my projects until next year?
I know you're not my lawyer, and I won't take any of your advice without further consultation, but any insight at all would be appreciated.
I'm thinking of quitting my job in April and working on a few of my side projects full-time. I'd like to get a new laptop for this purpose (as well as for personal use, roughly half-and-half), but it's likely that the models I'm looking at will get an update around the middle of the year, so I don't want to waste my money now. However, it's possible that I won't actually make any money from my projects until next year.
When you deduct something from your taxes as a work expense, is it deducted only from those taxes related to the work in question, or are all your taxes taken into consideration? My issue is that I'll be deducting the laptop as a work expense after I quit my current job, meaning that if I only get to expense the cost from the relevant work income, I might not be able to do it if I have no income from my projects. On the other hand, if it doesn't matter, I can deduct the cost of my laptop from the four months of income I'll have from my current job.
Also, do I have to have an LLC or something to qualify for work expense deductions? I was planning to just work on the projects without any bureaucratic complications.
Thank you for your advice!