I use my hardware mostly for work, and being independent contractor I should be able to get my hardware deducted in taxes.
But I need to write in my excel report the names of the products which most seem to be gaming peripherals. Ram module I use for work is called SniperX, CPU cooler is Floee Ring, and so-on. I think it might raise eyebrows should I ever be audited somehow, like is this really for work. Even my monitor is a gaming monitor.
When I think about building “workstation” kind of workstation with Threadripper, ECC memory and Quadro, using Lenovo mouse and membrane keyboard… ugh… in practice I rather keep using this what I have, even if strictly only for work.
But also I do game graphics so I need inspiration, so actually gaming is kind of work for me…
being independent contractor I should be able to get my hardware deducted in taxes.
Talk to a tax professional.
I need to write in my excel report the names of the products
Tax agencies usually don’t require you to file Excel spreadsheets. This makes me think what you’re doing is filing an expense report. If you’re getting reimbursed by someone for those expenses, you’re generally not allowed to deduct them.
Again, talk to a tax professional, but…
The packaging doesn’t matter for most tax situations. How the items are used in the course of business matters.
Yes I don’t think the tax authority will be interested in my Excel sheets, but I need to have receipts and such in order to be able to prove them, that’s for my own bookkeeping, this much I know.
I have talked to another entrepreneur here and he said he has been able to get things like air-conditioning of his office space and such deducted plus all his computer and software he uses. So probably it’s going to be just a total number of deductible I have to write into a field.
I’m not a tax professional, but I know when you look at customs classifications, there’s probably a category that says “computer parts” and a category that says “electronics” and a category that says “toys” and a category that says “weapons”.
As long as you don’t just say “sniper X” $1000, but say, computer component - ram memory - model “sniper X bla bla” -$1000 and have a receipt, I think it should be alright. (either for expense reporting or tax deduction… in case anyone starts looking). If you don’t have every single receipt it might be ok as well as long as it’s with reason. E.g. you’re not claiming $20 with receipts and $20million as a cash expense without receipts or names or any other trace.
So, I am a tax professional and deal with a couple hundred small business clients each year. That said, I’m not 100% on depreciation, but I know the basics and can get you at the very least in the right direction.
It doesn’t matter if you’re using “gaming” parts, it only matters what portion you’re using for work.
You could go in and figure out what percentage you’re using the computer for work vs. personal and that’s probably the most kosher way to do it. Alternatively you could say something as simple as “ram” or “cpu cooler” etc. and use the whole thing as an expense (I’d say somewhere in the middle if you’re really scared about it to be safest).
Now how you go about putting these things on your taxes. IIRC computer hardware and related things are either a 5 or 7 year property. However, there is a law that says you can section 179 expenses that are normally required to be depreciated up to something like $1m. This is probably the route you want to go for components that don’t cost much, or you’re trying to improve your tax situation in X year (like when you have a higher level of income/lower expenses than normal). You do need to keep the receipts/invoices of course, but that’s no big deal.