Entrepreneurship & Small Business

How do I claim a business expense?

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Deal Expert
Dec 4, 2010
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How do I claim a business expense?

I just bought a computer and would like to claim it on my tax return as a business expense but I don't have a business license. I do small design work for pittance here and there. Should I apply for a business license and then claim this purchase after the fact? Is that doable?
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Jr. Member
Nov 3, 2008
122 posts
169 upvotes
Supercooled wrote: I just bought a computer and would like to claim it on my tax return as a business expense but I don't have a business license. I do small design work for pittance here and there. Should I apply for a business license and then claim this purchase after the fact? Is that doable?
First... a computer isn't a business expense, but rather a capital expense. It's recorded as an asset, and will have no impact on your tax return. However, the depreciation on the computer is a business expense, and that's what you claim on your tax return.

Second... only the business use portion of the computer's depreciation is deductible. If you're using the computer for personal use as well, then you can't deduct 100% of the depreciation.

Third... you can't claim an expense if you don't have income, so I'm assuming you're also putting your 'pittance' on the tax return.

I could stand corrected on my next point, but I don't believe a business license has any bearing on what you can/can't claim on your tax turn if you're a sole-proprietor. I think you only need to concern yourself with any kind of registration if you're seeking to claim input tax credits.

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