Computers have become a way of life. Long gone are the days when these mechanical boxes were used only for desktop publishing and graphics. Nowadays, having a computer is as essential as having a cell phone.
As the use of the computers has increased in managing your client's daily lives, so have the tax deductions for buying one. Depending on the use that your client puts their computer to for investment purposes, the cost of the machine may be written off over a five-year period. Electronic trading has become the norm now. Most people use online stockbroker houses to buy stocks and shares in a company. If your client uses their computer primarily for buying and selling stocks and maintaining their investments, your client may be able to write off the whole thing in the first year.
Congress has allowed a maximum of $20,000 for the year 2000 to be written off for business equipment and expenses. This is to help those small businesses blossom much faster, thus helping the economy grow. This does not apply to employees who want to use the home computer for their personal use and want to write the cost off as a business expense.
They may be able to claim some deductions but only if they fit the following:
1.Must be related to work. It should be essential to your client keeping his or her job.
2.Must be for the benefit of the employer. Your client is unable to improve their performance at work unless they do some work at night. Your client is unable to get into the work building. Your client has to work at home; the computer your client uses at home is tax deductible.
As your client can see its not as easy to write off a home computer as a business expense under the employment of a company. The home computer deduction is for people who are self employed or small business owners or are using it to make investments.