Is the following a self employment asset or expense on my tax return?
These are useful and collceted by Anne!
Q&A: Is the following a self employment asset or expense on my tax return?
I am a freelance web designer and last March my computer crashed and I had to buy a new one to replace it. Then in November my monitor stopped working and I had to buy new one. I have receipts for both purchases. Are those considered assets or an expense?
The answer in the following:
Answer by Daniel C
Either.
If you declare it as an expense you get the one-time writeoff and that’s it.
If you declare it as an asset you increase your net value but also get to amortize the cost and depreciation over three-five years.
The former is usually what the small guys (like yourself) do. The latter is more complex and is usually done by the big guys or for very large purchases.
Call it an expense and save yourself a lot of trouble.
What do you think? Answer below!
