Micro Eng <PICLIST@mitvma.mit.edu> wrote:

> This year I finally did some contracting where I was not considered
> an employee so I got the good ol 1099-MISC.  Thats ok, fill out the
> schedule C and figure out my taxes on it, pretty straight forward.
>
> If I bought equipment, such as a laptop, primarily for doing this
> work, can I write it off?

    I'm neither an attorney nor a CPA, but yeah... You can write off
    the percentage of your cost equal to the percentage of time that
    the laptop is used for business.  In other words, if you paid
    $2000 and use the laptop 50% for business and 50% for personal
    activities, you can write off $1000.

    If your expenses don't exceed the Section 179 limit (somewhere
    around $15-20k these days), you don't have to amortize/depreciate
    your expenses over multiple years.

> What if I payed for part of it last year, and part of it in this
> year? I assume I can only account for the amount I payed this year
> correct?

    If your payments extended over 2001 and 2002 and your accounting
    methods are what I expect they'd be for a casual consulting gig,
    then I believe that you are correct.

    If your business's 2001 income wasn't enough to offset the 2001
    portion of your laptop payment, you can carry the difference
    forward to 2002 and use it to offset 2002 income... So if you
    made no money from this business in 2001, you could effectively
    write off the entire laptop cost in 2002.  If you've already
    submitted your 2001 return and now want to amend it, you can do
    that pretty easily; there's a form from the IRS.

> However, like many on here, I am working toward releasing some
> products where I will be selling locally to some businesses (you
> know....if you make it, they will buy it situation). So how does
> one account for this income? Still on schedule C I imagine?

    Yep, Schedule C is the place where all your Sole Proprietership
    data goes.

    You may want to think about buying some commercial tax
    preparation software (like TurboTax or whatever); it'll make all
    this stuff real easy.

    -Andy

=== Andrew Warren -- aiw@cypress.com
=== Principal Design Engineer
=== Cypress Semiconductor Corporation
===
=== Opinions expressed above do not
=== necessarily represent those of
=== Cypress Semiconductor Corporation

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