RE: Buying software oneself in order to learn it

["John Locke" <mail -at- freelock -dot- com>]

Steve Arrants wrote:
[
Win Day writes:
> If you're a full-time employee, though, I don't think you'd
> qualify.  Don't 
> you have to be an independent contractor to qualify for the 
> tax break in 
> Canada?
> 

In the US, too.  And there are some weird, complicated laws about
depreciating the cost of software.  Like, unless the software becomes
useless after one year (tax preparation software) you've got to do a
three-year depreciation/amortization. But the IRS rules are so vague and
contradictory that you could also deduct the cost as a business expense
because it would be too complicated to use a three-year depreciation due
to what my accountant calls the 'de minimus' rule. 
]

As an independent contractor, yes, you have to depreciate software.
Except that you get somewhere around $19,000 per year that you can
deduct directly on a schedule C (self employment income). Don't know
about you, but I don't spend that much on my computers/software/other
depreciable items...

And, no, you don't have to be a contractor to deduct your business
expenses. If it's related to your full-time job, you can deduct your
(unreimbursed) business expenses on a Schedule A if you file one. That's
the same one you file after buying your house--where you itemize
everything, and don't take the standard deduction. 

My mother, as a teacher, did this all the time--deducting everything she
bought for the kids in her classes...

I highly recommend Turbo Tax for figuring all this stuff out...

Cheers,
John Locke
http://www.freelock.com


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