Questions and Answers

Question: Do I have to keep detailed track of all my business use of a home computer?

Answer: Fortunately, not anymore.

Strategy: Rest easy. Thanks to a change included in the Tax Cuts and Jobs Act, you no longer have to keep detailed records when you use one of these devices.  It all has to do with the tax law definition of “listed property” that can potentially be used for business and personal purposes.

Generally, you must keep adequate records and corroborating evidence to claim business depreciation deductions for assets characterized as listed property. This means that you must essentially account for every time the property is used for business.  The items treated by the IRS as listed property include passenger vehicles, other property used as a means of transportation and property used for entertainment, recreation or amusement.  Previously, computers and peripheral equipment—like laptops, tablets and printers— were also considered to be listed property.

The TCJA removed computers and peripheral equipment from this category.
So you don’t have to log in records of business use every time you log on. The TCJA change is generally effective for property placed in service after 2017.

Note that computers and peripheral equipment were already exempted from the strict substantiation rules if the property was located at a “regular business establishment” like your company office or a home office that’s your principal place of business if you’re self-employed. But busy corporate business owners who used computers at home or worked on their laptops or
tablets when they were away from home still had to comply.  In addition, deductions for listed property are effectively reduced if your business use for the year is 50% or less of your total use. The TCJA also eliminated this potential tax obstacle for computers and peripheral equipment.

Menu