Lynne at The Pottery Web on wed 26 jul 00
>Hi Sandra--why doesn't your accountant just expense your equipment
>purchases? The IRS has provided for small businesses to expense equipment
>purchases up to $10,000 ( I think--it was this amount, but could have been
>raised). I do not depreciate anything--i need my deductions in the year
>of purchase. If you depreciate these items, the deduction each year is
>hardly noticeable because the purchase price is so small. Computers, cell
>phones, etc. fall into this category. I used it for wheel also. I am not
>a CPA, but got this advice from mine. Ask yours--it is worth checking into.
Lynne in Atlanta
>
>
>______________________________________________________________________________
>Send postings to clayart@lsv.ceramics.org
>
>You may look at the archives for the list or change your subscription
>settings from http://www.ceramics.org/clayart/
>
>Moderator of the list is Mel Jacobson who may be reached at
>melpots@pclink.com.
sandra nissen on wed 26 jul 00
I am fixin' to set up my clay studio as a legitimate business and step
up from the hobby level. This is both exciting as well as very scary. I
have a couple of questions I hope my fellow clayarters can help me with.
My accountant cannot decide which catagory to list my kind of equipment
(ie kilns, wheels, slabroller) for depreciation. And also, how to
figure the depreciation on this equipment. Any other advice from those
who have already lived through this would be much appreciated. Are the
Wendy Rosen books or Steve Branfman's new book worth getting? Thanks so
much.
Sandra
Woodstock, GA
Diane G. Echlin on thu 27 jul 00
Are the
Wendy Rosen books or Steve Branfman's new book worth getting?
I can whole-heartedly recommend Steve Branfman's book: it is very well thought
out, down to earth, and informative. There are so many nuggets of wisdom in there,
it is surely worth the price many times over!
(And I have no affiliations with Steve or the Potter's Shop.)
Di in Connecticut, glad for the rain but wishing it would stop now!
alton howell on thu 27 jul 00
Just a FYI. Equipment purchases do not legally qualify for a current
expense. Items that do qualify would need to have a usable life of around 1
year. Since wheels and kilns, etc. can be used for a few years, the IRS
would absolutely throw this out if you were audited.
----- Original Message -----
From: Lynne at The Pottery Web
To:
Sent: Wednesday, July 26, 2000 9:43 PM
Subject: Re: Business of Clay
> >Hi Sandra--why doesn't your accountant just expense your equipment
> >purchases? The IRS has provided for small businesses to expense
equipment
> >purchases up to $10,000 ( I think--it was this amount, but could have
been
> >raised). I do not depreciate anything--i need my deductions in the year
> >of purchase. If you depreciate these items, the deduction each year is
> >hardly noticeable because the purchase price is so small. Computers,
cell
> >phones, etc. fall into this category. I used it for wheel also. I am
not
> >a CPA, but got this advice from mine. Ask yours--it is worth checking
into.
>
>
> Lynne in Atlanta
>
> >
> >
>
>___________________________________________________________________________
___
> >Send postings to clayart@lsv.ceramics.org
> >
> >You may look at the archives for the list or change your subscription
> >settings from http://www.ceramics.org/clayart/
> >
> >Moderator of the list is Mel Jacobson who may be reached at
> >melpots@pclink.com.
>
>
____________________________________________________________________________
__
> Send postings to clayart@lsv.ceramics.org
>
> You may look at the archives for the list or change your subscription
> settings from http://www.ceramics.org/clayart/
>
> Moderator of the list is Mel Jacobson who may be reached at
melpots@pclink.com.
>
JDyroff@AOL.COM on thu 27 jul 00
Another lurker coming out of the woodwork....
Certain kinds of property, such as some equipment, may be taken as an expense
deduction even though it would normally constitute a capital investment and
require depreciation treatment. The taxpayer makes an election to treat
those items as expenses, to be written off in one taxable year. For 2000,
the limit is $20,000. Check with your accountant or tax lawyer for the
details.
Thanks for all the ongoing advice on this list.
Jo Dyroff
(attorney and struggling potter)
Jeremy/Bonnie Hellman on thu 27 jul 00
Alton,
Equipment (including pottery equipment) up to a total of $19,000 in 1999
which I believe goes up to $19,500 for tax years beginning in 2000, you
purchase in that tax year qualify under tax code section 179 to be expensed
in the year of purchase on your business return. That is how you "expense"
them.
Also, most CPAs use a 'depreciation threshold' whereby each piece of
equipment under a certain amount is routinely expensed. Otherwise you'd be
depreciating every little $2 tool you buy.
However, if you convert a hobby into a business, the large ceramics
equipment you already own, for example your wheel, kiln, pugger, etc. cannot
be depreciated under code section 179, and must be depreciated for the
useful MACRS life of 7 years (or 10 years, if you so choose although it
would be rare that you'd choose the longer life).
Bonnie
Bonnie Hellman, CPA in PA & CO
> From: alton howell
> Reply-To: Ceramic Arts Discussion List
> Date: Thu, 27 Jul 2000 08:31:28 -0400
> To: CLAYART@LSV.CERAMICS.ORG
> Subject: Re: Business of Clay
>
> Just a FYI. Equipment purchases do not legally qualify for a current
> expense. Items that do qualify would need to have a usable life of around 1
> year. Since wheels and kilns, etc. can be used for a few years, the IRS
> would absolutely throw this out if you were audited.
> ----- Original Message -----
> From: Lynne at The Pottery Web
> To:
> Sent: Wednesday, July 26, 2000 9:43 PM
> Subject: Re: Business of Clay
>
>
>>> Hi Sandra--why doesn't your accountant just expense your equipment
>>> purchases? The IRS has provided for small businesses to expense
> equipment
>>> purchases up to $10,000 ( I think--it was this amount, but could have
> been
>>> raised). I do not depreciate anything--i need my deductions in the year
>>> of purchase. If you depreciate these items, the deduction each year is
>>> hardly noticeable because the purchase price is so small. Computers,
> cell
>>> phones, etc. fall into this category. I used it for wheel also. I am
> not
>>> a CPA, but got this advice from mine. Ask yours--it is worth checking
> into.
>>
>>
>> Lynne in Atlanta
>>
>>>
>>>
>>
>> ___________________________________________________________________________
> ___
>>> Send postings to clayart@lsv.ceramics.org
>>>
>>> You may look at the archives for the list or change your subscription
>>> settings from http://www.ceramics.org/clayart/
>>>
>>> Moderator of the list is Mel Jacobson who may be reached at
>>> melpots@pclink.com.
>>
>>
> ____________________________________________________________________________
> __
>> Send postings to clayart@lsv.ceramics.org
>>
>> You may look at the archives for the list or change your subscription
>> settings from http://www.ceramics.org/clayart/
>>
>> Moderator of the list is Mel Jacobson who may be reached at
> melpots@pclink.com.
>>
>
> ______________________________________________________________________________
> Send postings to clayart@lsv.ceramics.org
>
> You may look at the archives for the list or change your subscription
> settings from http://www.ceramics.org/clayart/
>
> Moderator of the list is Mel Jacobson who may be reached at
> melpots@pclink.com.
>
Theoblue44@AOL.COM on thu 27 jul 00
Any item with a useful life of over one year must be depreciated for tax
purposes to comply with the IRS Code for business expenses.
John Crittenden, JD
Lynne at The Pottery Web on sat 29 jul 00
At 08:31 AM 07/27/2000 -0400, you wrote:
>Just a FYI. Equipment purchases do not legally qualify for a current
>expense. Items that do qualify would need to have a usable life of around 1
>year. Since wheels and kilns, etc. can be used for a few years, the IRS
>would absolutely throw this out if you were audited.
Thanks for the tip. I will contact my cpa again--i called him before
answering the response, but did not hear back from him until the next
day. He repeated that we did deduct my purchases of a wheel and kiln as a
section 179 expense. i did not report his entire response, but from what
you say, it would not matter. He told me i could deduct these purchases as
a section 179 expense. what he also said that i did not mention is that
the expensing of these purchases cannot create a net operating loss for the
business in the year in which they are deducted. The amount for 2000 is
$20,000, but there is a $10,000 limitation i believe for a single piece of
equipment. However, you can carry the balance over to the next year. I'm
sorry if i gave incorrect information--just repeating what my cpa did on my
tax return. obviously, i'm going to discuss it with him further and
perhaps i can better understand what he did!
> > >
> >
> >___________________________________________________________________________
>___
> > >Send postings to clayart@lsv.ceramics.org
> > >
> > >You may look at the archives for the list or change your subscription
> > >settings from http://www.ceramics.org/clayart/
> > >
> > >Moderator of the list is Mel Jacobson who may be reached at
> > >melpots@pclink.com.
> >
> >
>____________________________________________________________________________
>__
> > Send postings to clayart@lsv.ceramics.org
> >
> > You may look at the archives for the list or change your subscription
> > settings from http://www.ceramics.org/clayart/
> >
> > Moderator of the list is Mel Jacobson who may be reached at
>melpots@pclink.com.
> >
>
>______________________________________________________________________________
>Send postings to clayart@lsv.ceramics.org
>
>You may look at the archives for the list or change your subscription
>settings from http://www.ceramics.org/clayart/
>
>Moderator of the list is Mel Jacobson who may be reached at
>melpots@pclink.com.
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