I have a five year old pc (cost $1800) which I haven't claimed depreciation on before ? would it be worth doing an amendment to claim the fully depreciated cost for the last few years? (I invest in the stock market full time from home, 75% of the pc use is related to that.)
Hi, I think you need to understand depreciation rules. Let me explain with example, if buy a copy machine for $1,600 at the end of March. Assuming the machine has a salvage value of $400, you can depreciate $1,200 of the cost over the life of the copier. A copy machine is considered 5-year property for tax purposes. I hope this helps you. Thanks
Hi jp777, this is my understanding: There are 2 methods to depreciate your assets. 1. Diminishing value (highest decline in earlier years) 2. Prime cost (equal decline over asset life) If you want to depreciate costs for 5 years, you would need to amend each year separately. Each amendment would cost you 1 year's worth of tax return (i.e. whatever your accountant charges you to do this year's tax return). I am estimating you could probably depreciate $250 - $300 per year. Depending on your marginal tax rate, you would get back a portion of this. Then you have to pay your accountant. Is it worth it? (Almost definitely not) If you really wanted to, your best option would be to use Option 1 and only amend the year with the highest decline (Year 1 or 2, depending on your purchase date). Then potentially you could depreciate $400 - $500 in that single year. Depending on you tax rate, you would get back a portion of this, and so now you have to pay your accountant...again, is this worth it? Conclusion - Probably not worth it, but at least now you know, for next time! Cheers PS. Not an accountant! (so seek independent advise)
