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Dubsize
October 15, 2023
Question

Categorize purchase of new smartphone

  • October 15, 2023
  • 1 reply
  • 0 views

Hello fellow QuickBooks users,

I recently purchased a smartphone for my business and I'm trying to figure out how to categorize this expense in QuickBooks. My business is a Single Member LLC taxed as a C-Corp. The smartphone cost me around $1,850 and I also took an AppleCare+ plan for 2 years with it. It's used 100% for business purposes.

I'm leaning towards recording it as a business expense since its cost is below the $2,500 threshold. However, I'm unsure if this is the correct approach, especially in the long term. Should it be categorized as an asset and depreciated over time instead?

I'd appreciate any insights or experiences you might have regarding how to properly categorize such expenses in QuickBooks.

Thank you in advance for your help!

1 reply

Rainflurry
Rainflurry
October 15, 2023

@Dubsize 

 

Given that you are an LLC taxed as a C-corp., you must have received some guidance from a tax professional on electing to be taxed as a C-corp.  That is a relatively rare election due to the generally negative tax implications but, presumably, you had reasons for choosing it.  I would suggest contacting them as this issue will arise often in the life of the business and is dependent on variables that do not exist had you elected to be taxed as a pass-through entity (SP or S-corp).  Generally speaking, a tax deduction now is more valuable than a future deduction unless your income tax rate is projected to be higher in future years.  I assume you already know this as not many users on this forum are even aware of the $2,500 de minimis safe harbor. 

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