Whether you are a work-at-home mom or the owner of the large business, you can depreciate equipment used in your business on your federal taxes. There are a few rules and regulations you need to follow in order to take advantage of this. Here's how to go about claiming the depreciation for your business equipment on your federal taxes.
Decide what type of equipment you are depreciating. According to the Federal government, equipment falls into one of three categories. The classifications are furniture and equipment, property bought for business use and lastly, personal property converted to business use. The tax depreciation rules vary slightly for each one, therefore it is important for you to determine which tax depreciation option you will be taking advantage of.
Visit the Internal Revenue Service website. To ensure that you are taking the proper deductions for the type of business equipment, it's best to go to the website and download the appropriate forms. Once you visit the Internal Revenue Service website, do research for publication number 946. The title of the publication is "How to Depreciate Property."
Maintain accurate records to back up your deductions. If you're going to take tax depreciation for business equipment, make sure you can justify the date the equipment was first put in use. Depreciation begins on the first date of use until either five or seven years afterwards. In the event of an audit, you do want to have your documentation to back up your claims.
Determine if the equipment falls under the five-year or seven-year depreciation schedule. The government allows you to take either five years or seven years worth of depreciation depending on the equipment. Equipment such as typewriters, calculators, adding machines, computers and copiers generally fall under the five-year depreciation rule. Equipment such as desks furniture and pictures, fall under the seven-year rule. Check with publication number 946 to ensure that you are taking the correct depreciation.
Itemize your deductions. In order to claim business equipment depreciation, you must submit itemized tax forms.