Question by yp_joe_arlington_887: Is software purchased for a small business tax deductable?
I’m planning on purchasing some design software at the end of the year. Close to $ 5k. The plan is to use it to design some projects I have interest in bringing to market and offering design services to people on the side to bring in some income. Is this software tax deductable/ tax write-off? If not, under what circumstances would I be able to deduct the cost of software from my taxes?
Answer by Bostonian In MO
Small software purchases can be expensed, however larger investments such as your are amortized over time.
See the instructions for Form 4562 http://www.irs.gov/pub/irs-pdf/i4562.pdf as well as IRS Pub 946 http://www.irs.gov/pub/irs-pdf/p946.pdf .
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