If you bought a computer for your business, you can generally deduct how to deduct a computer purchase on your taxes in one of four ways: expense it immediately under the de minimis safe harbor if it cost $2,500 or less, write off the full business-use cost in year one using Section 179 or 100 percent bonus depreciation, or spread the cost over five years using standard depreciation. You report the write-off on IRS Form 4562, and you can only deduct the share of the cost that matches your business use of the machine.
Who Can Take the Deduction
The computer has to be an ordinary and necessary business expense — common in your line of work and helpful for running it.1Office of the Law Revision Counsel. 26 U.S.C. 162 – Trade or Business Expenses A freelance designer buying a laptop for client work clearly qualifies. A tablet bought only for streaming does not.
Sole proprietors, single-member LLCs, partnerships, S corporations, and C corporations can all claim some form of write-off for a computer used to earn business income.
W-2 employees cannot. The Tax Cuts and Jobs Act suspended the deduction for unreimbursed employee business expenses, and the One, Big, Beautiful Bill Act made that elimination permanent. If your employer will not provide or reimburse a computer you need for your job, the cost is not deductible on your federal return.
Deduct Only the Business-Use Share
You can only write off the portion of the cost that matches business use. Divide the hours you use the computer for business by the total hours you use it during the year. Log 900 business hours out of 1,200 total, and your business-use percentage is 75 percent — you deduct 75 percent of the purchase price.2Internal Revenue Service. Publication 946 (2024), How To Depreciate Property – Section: Additional Rules for Listed Property
That percentage applies to whichever deduction method you choose. Keep a simple log or calendar tracking the split; you don’t need to record every minute, but you should have enough to support the number on your return.
One older rule no longer applies. Since 2018, computers are no longer treated as “listed property,” so you don’t need business use above 50 percent to use Section 179 or bonus depreciation, and the special recapture rules for listed property don’t apply if your business use drops later.3Office of the Law Revision Counsel. 26 U.S.C. 280F – Limitation on Depreciation for Luxury Automobiles, Certain Property Used for Transportation, Etc.
Four Ways To Write Off the Cost
De Minimis Safe Harbor for Purchases of $2,500 or Less
If your computer cost $2,500 or less, this is the simplest route. The de minimis safe harbor election lets you deduct the full cost as a current business expense in the year of purchase, with no depreciation schedule to track.4Internal Revenue Service. Tangible Property Regulations – Frequently Asked Questions – Section: A De Minimis Safe Harbor Election Businesses with an audited financial statement can use a $5,000 threshold instead.
The threshold applies per invoice or per item, and anything billed on the same invoice — delivery, setup — counts toward it. If the invoice total goes over $2,500, use one of the other methods for that purchase.
To make the election, attach a statement titled “Section 1.263(a)-1(f) de minimis safe harbor election” to your timely filed return, including your name, address, taxpayer identification number, and a note that you are making the election. You choose this each year; it is not a permanent method change.
Section 179: Full Cost in Year One
Section 179 lets you expense the entire business-use portion of the cost in the year you place the computer in service.5Office of the Law Revision Counsel. 26 U.S.C. 179 – Election to Expense Certain Depreciable Business Assets For most small businesses, the dollar caps are irrelevant in practice: the 2026 limit is $2,560,000 in total Section 179 property.6Internal Revenue Service. Revenue Procedure 25-32 – Section: Election to Expense Certain Depreciable Assets
The real limit for most people is income. Your Section 179 deduction for the year cannot exceed your total taxable business income. Buy a $3,000 laptop with $2,000 in net business income, and you deduct $2,000 this year and carry the remaining $1,000 forward.
100 Percent Bonus Depreciation
Bonus depreciation under Section 168(k) is a second route to a full year-one write-off. The One, Big, Beautiful Bill Act restored a permanent 100 percent additional first-year depreciation deduction for qualifying property acquired after January 19, 2025.7Internal Revenue Service. Treasury, IRS Issue Guidance on the Additional First Year Depreciation Deduction Amended as Part of the One, Big, Beautiful Bill A computer bought and placed in service during 2026 qualifies for the full 100 percent.
Two differences from Section 179 matter. Bonus depreciation is not capped by your taxable income, so it can create or increase a net operating loss you carry to other years. It also applies automatically unless you elect out, while Section 179 requires an affirmative election. Many owners layer the two: Section 179 up to the income limit, then bonus depreciation for the rest.
Five-Year Depreciation Under MACRS
If you’d rather spread the deduction, the Modified Accelerated Cost Recovery System assigns computers a five-year recovery period.8Internal Revenue Service. Depreciation and Recapture You deduct a portion of the cost each year using a declining-balance or straight-line method.
A half-year convention applies by default, treating the computer as placed in service at the midpoint of the year regardless of the actual date. That gives you a half-year’s depreciation in year one and year six.9eCFR. 26 CFR 1.168(d)-1 – Applicable Conventions, Half-Year and Mid-Quarter Conventions
Standard depreciation makes sense when your income is low this year and you expect it to rise, or when you simply want the deduction to track the years you actually use the machine. For most single-computer purchases, Section 179 or bonus depreciation produces a bigger year-one benefit.
Software and Accessories Follow the Same Rules
Off-the-shelf software — programs you buy or download without a custom development contract — qualifies for Section 179 the same way the computer does. Operating systems, productivity suites, design programs, and accounting software all count. Software costing $2,500 or less also fits the de minimis safe harbor.
Monitors, keyboards, external drives, docking stations, printers, and other peripherals are depreciable business equipment on the same terms as the computer.10Internal Revenue Service. Publication 946 (2024), How To Depreciate Property You can expense them under Section 179, use bonus depreciation, depreciate them over the recovery period, or apply the safe harbor if the per-item cost is low enough. Business-use percentage applies to each item individually.
Records To Keep
Save the purchase receipt showing the date, total cost, sales tax, and any shipping or setup charges. Email confirmations and credit card statements work as supporting records, and the IRS accepts electronic copies as long as they are legible.11Internal Revenue Service. Revenue Procedure 97-22
If the computer is not used 100 percent for business, keep a usage log. A spreadsheet or calendar notation is enough, as long as it covers enough of the year to establish a reliable pattern and you can explain how you arrived at your percentage.
Keep everything for at least three years after filing the return that includes the deduction. If you are depreciating the computer over multiple years, hold the records for three years after the final depreciation deduction.
Where To Report It on Your Return
Form 4562 is where you report depreciation, Section 179 expensing, and bonus depreciation.12Internal Revenue Service. About Form 4562, Depreciation and Amortization (Including Information on Listed Property) You enter the cost, the date placed in service, the business-use percentage, and the deduction method.13Internal Revenue Service. Instructions for Form 4562 (2025) Where the deduction flows next depends on your entity:
- Sole proprietors carry the total to Schedule C, which reduces net self-employment income on Form 1040.
- Partnerships and S corporations claim the deduction on the entity return and pass each owner’s share through on Schedule K-1; shareholders then report their share on Schedule E after applying basis and at-risk limitations.14Internal Revenue Service. Shareholder’s Instructions for Schedule K-1 (Form 1120-S) (2025)
- C corporations report the deduction directly on Form 1120 as part of depreciation expense.
If you used the de minimis safe harbor, skip Form 4562 for that purchase. Deduct the cost as an ordinary business expense on the form you use for your income — Schedule C for sole proprietors — and attach the election statement to your return.
Selling or Trading the Computer Later
When you sell, trade in, or discard a business computer, you may have a taxable gain or a deductible loss. The key figure is adjusted basis: original cost minus all depreciation you claimed or could have claimed. Sell for more than adjusted basis and the difference is gain; sell for less and it’s a loss.
Any gain up to the depreciation you previously deducted is taxed as ordinary income, not capital gains. This is depreciation recapture, reported on Form 4797.15Internal Revenue Service. Instructions for Form 4797 – Sales of Business Property Write off a $2,000 laptop entirely under Section 179, sell it two years later for $500, and the $500 is ordinary income because your basis is zero.
A trade-in is treated as a sale. Since the Tax Cuts and Jobs Act, like-kind exchange treatment applies only to real property, not to computers or other personal property.16Internal Revenue Service. Tax Cuts and Jobs Act – A Comparison for Businesses The trade-in value counts as your sale price, and you calculate gain or loss against the computer’s adjusted basis.
Check Your State’s Rules Separately
Your federal deduction and your state deduction for the same computer may not match. Many states do not follow the federal bonus depreciation rules — roughly half decouple entirely, and others partially conform or set their own caps. State treatment of Section 179 also varies, with some states capping the deduction well below the federal limit.
Check your state’s current conformity rules before filing. You may need to add back part of your federal deduction on your state return and depreciate the computer over a longer period for state purposes.