depreciation of computer

[oceanlovin'ea]

Client that I do bookkeeping for in addition to his taxes bought a computer in May, but he bought it in pieces from NewEgg.com and tigerdirect.com and from Best Buy and Office Depot.

The invoices are broken down of course. But there are computer equipment, win pro 7, which is software and also the service replacement plan.

My thinking is that I need to break out the software separately and then expense the service plan. Is that what you would do?

Linda

[JAinNC]

Well it like building a ship

I would total all into one cost for the computer including the sofware. If he could have found the exact component loaded for the right price, he likely wouldn't have built it.

This way at year end the decision can be elected to Sec 179 part or all of it OR if a slow year, slower depreciation can be used to help more the following year.

JAinNC

[S T]

Service Plan

I usually will list the service plan separately stated, such as 3 years or whatever the term is.
I haven't had one that listed the Operating Software Separately, so would probably add to the cost of the computer. Same with any MS software such as Excel, Word, etc.

Other software, depending, I list separately. Some software is only good for the purchase/install and then a 1 year renewal fee. ?? Expense purchase and then each year the renewal fee??? If software pertains only to that business application, I think it is 3 year depreciation ?

Sandy

[Kram BergGold]

service plan

The servivce plan can't be expensed if it covers a period greater than 1 year. It needs to be amortized. As for the rest I would set up all computer parts as one item and SW as another. Then depreciate or claim 179..