Is a Laptop Tax Deductible?
Home Office Deduction
- You can deduct a laptop if you use it in your home office. However, qualifying for the home office deduction is not always clear cut. Normally, you must use the home office exclusively for business, and incidental personal reasons, such as when a child calls you from school to pick him up because he became suddenly ill. You can prorate the cost of laptop based on how much you use it for business use. Thus, if you use the home office computer 30 percent of the time for business, you can probably deduct 30 percent of the cost of a laptop, according to Intuit.
- You can write off a laptop as a business expense when your employer requires you to use one but does not reimburse you for the cost of the laptop. To qualify for this deduction, you must use this for the employers convenience, not just because you want to deduct the laptop. For instance, if you must have a laptop to make a sales pitch but the employer does not provide a laptop, you can probably deduct the laptop. Again, you must log how often you use the laptop for business and personal use. If you use the computer for more than 50 percent business use, you can depreciate over five years, or the year in which you put it into use if you use the laptop mostly for personal reasons. The value of the deduction and any other miscellaneous expenses must exceed 2 percent of your net income to deduct it from your income.
- The Internal Revenue Service does not let you deduct a laptop as an educational expense or an expense to take an educational tax credit, except in certain circumstances, such as when the college requires a laptop for enrollment. You can, however, withdraw from a college savings plan, such as a Coverdell or 529, tax-free to purchase a laptop and other technology, like a printer, for college, but it must be primarily for educational purposes. Technology for recreational purposes does not count as a legitimate expense for a savings plan. For example, you cannot withdraw money to purchase a laptop specifically for gaming. Also, the college must be an accredited educational institution -- which usually means it can receive aid from the Department of Education.
- Keep a log of how often you use the laptop for business and personal use. You may have to substantiate the laptop as a business deduction in case of an IRS audit. Hire a tax professional to help you claim a home office deduction or help you determine if your laptop purchase qualifications for any other tax break, such as an educational expense.