Reporting Your Depreciable Property

    June 19, 2003

Hi Wayne: Can I ask you for one more piece of advice? (Two parter)(all on Schedule C)

I bought several hard drives/ls-120 drives/ram chips/2 monitors/extra Keyboards/Mice, etc.; all for backups (The “What-If?!” stuff)…

My guess is that they go either into Maintenance (line 21) or Supplies (line 22) and all floppy disks/ls-120 disks/Printer inks/paper, etc. just go into Office Supplies (line 18).

Part 2
I bought a Shipping Scale for UPS & USPS, two APC’s, and several hand tools. I just want to write them off where would I list them? (line 27 — as Misc. equipment ??)

Thanks again for your help

Bill Oertel Jr.

Hi Bill:

Equipment with a useful life of more than one year should be depreciated or deducted via Section 179. Either way, the purchase price is reported on Form 4562 and then the appropriate expense amount is transferred to Schedule C.

Most of the stuff you mention (except for the disks & office supplies) sounds like depreciable property.

Form 4562 (and the whole topic of depreciation and Section 179) is quite complex. I’ve written an article recently that explains some of the basics: “New Tax Law Turns Small Biz Loophole Into A Crater!“.

There’s only so much I can help you with in this Q&A format. If you have more questions re: depreciation, you should consult with a local tax professional — or get my ebook and take me up on my offer to review 4 of your previously filed income tax returns, along with a 60-minute phone consultation to pinpoint tax reduction strategies applicable to your particular situation.

Since you are filing Schedule C, I assume you are a Sole Proprietor. Have you checked into the tax advantages of incorporating?

Hope that helps.


Wayne M. Davies is author of 3 tax-slashing
eBooks for small business owners and the self-employed. For a
free copy of Wayne’s 25-page report, “How To Instantly Double
Your Deductions” visit