Posted by Art_MD on 12/15/05 5:41pm
Msg #82894

GPS - Business expense ?

Has anyone talked to a tax pro about the deductability of a GPS system as a business expense? Does it have to be amortized?

TIA

Art

Reply by Tina_MA on 12/15/05 5:53pm
Msg #82901

Re: GPS - Business expense?

It is a business expense.

I was told by an IRS employee, who works in the small business section doing audits, that as long as it didn't exceed my income for the month that I bought it, that I could deduct the whole thing without a problem.

At the time (two plus years ago), the model I bought had just come out, and with the car kit, total came to $662 and change.

Reply by Calnotary on 12/15/05 6:06pm
Msg #82905

Re: GPS - Business expense?

Taxes are very complex. Better get the advice of a Tax Pro.
It could be deduct it in the first year or amortized you tax pro will know.
Also it could be that since you can also use it for personal and business you will have to
do a business/personal percentage I think.JMHO. No tax advice here.

Reply by Brenda_NC on 12/15/05 6:14pm
Msg #82907

Re: GPS - Business expense?

Ask your tax professional about 179 expense. This may apply if the total amount is under the the amount allowed by law. You can also check this information out at www.irs.gov Search under 179 depreciation expense and dollar limitations.

Reply by taxpro on 12/17/05 2:09pm
Msg #83147

Re: GPS - Business expense?

This is a perfect example of why I never ask anyone at the IRS for tax advice. That may be his or her "rule of thumb" for expensing assets, but nowhere in the code does it mention that an asset may be expensed if it's cost doesn't exceed your income for that month. I represent taxpayers before the IRS in audits, and I can't tell you how many times I've had auditors try to disallow deductions that are perfectly legal, just because they say so!!! Then we go to appeal, and win it, but the auditors just keep right on doing it to other people. When they get caught, nothing happens to them, they just keep bluffing taxpayers into overpaying their taxes. Oh well. Sorry to vent, I got off on a tangent....But to answer the question, Yes! If you bought the GPS for business purposes, and you use it for business, you may deduct it. If it has a "class life" of over a year, it must be depreciated. If it's a depreciable asset, you may elect to expense it the first year, using Section 179, but you still must complete Form 4562 (Depreciation and Amortization), it must be qualifying property for Section 179 expensing (a GPS unit would), it must be used more than 50% for business, you can't expense over $105,000 in 2005, and the total of qualifying property purchased can't exceed $420,000 (I know, what notary spends that much anyway?) and a Sec 179 deduction can't take you into a loss. If this is your first year and your expenses exceed your income, you may elect Sec 179 anyway, and carry it over to the next year. Otherwise you would depreciate it over 5 years.

Reply by Rick_WA on 12/16/05 12:25am
Msg #82967

Art, please feel free to contact me by e-mail or phone and I will explain this to you. I am a small business owner and an accountant that operates One Way Bookkeeping Service just outside of Seattle. [e-mail address]