I can't and won't give tax advice, but since it sounds like you are writing
about US taxes, I can share a few generalizations.
1. you can likely get by this year by following the instructions for 1040 &
Sch C. These usually clearly define the "paid this year, used that year
questions" If you purchased the tools the year before you intended to use
them for profit, you most likely will get no benefit from the expense.

2. You could also take a chance and file in ignorance - since the IRS has
been in a very lenient mood.

3. You'd do better to spend all the extra $ you earned on professional
advice - (CPA style only) if you want to keep earning extra $$ year after
year without tax problems or legal headaches. I expect any CPA worth his
salt will advise that you set up a legal entity of some sort, profit corp,
LLC, etc... in order to facilitate this. Another reason is that as an
individual selling to businesses, you are bound to eventually find a
customer who will buy from you because you are an individual and he knows he
can sue & win your home out from under you, simply because he can afford the
legal fees - even if you never do anything wrong or make anything defective.

4. If you don't believe there are people out there looking to exploit, abuse
& rob you in this way, give up now and stay dedicated to your day job.

Just my 2 cents
C

> -----Original Message-----
> From: pic microcontroller discussion list
> [mailto:PICLIST@MITVMA.MIT.EDU]On Behalf Of Micro Eng
> Sent: Monday, February 03, 2003 9:32 AM
> To: PICLIST@MITVMA.MIT.EDU
> Subject: [OT]: Tax questions relating to contracting and
> small business
>
>
> First off....if this turns into a thread about why we pay taxes,
> etc...someone please KILL it.  This is related to a real question.
>
>
> 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? 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?
>
> 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?
>
>
>
>
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