De Minimus Safe Harbor Election

[SherriW]

This is my 2nd year of daycare business. I have always efiled my taxes using the "Free File Fillable Forms" from IRS.gov. It basically is just filling in the blanks and does no tax work for you. This method will not allow a statement to be attached.

This year i have a couch purchase of $2456.34 and a Chair purchase of $545.85.

T/S% is 29%

Schedule C, line 27a will read:
"Furniture $870.64

I assume I will need a safe harbor statement. Am I correct?

Is there another efile/"just fill in the form" method that will allow me to attach a statement? Should i just mail in the paper tax forms? is there any reason to efile rather than mail in tax forms other than delay in refund?

[TomCopeland]

safe harbor

This is my 2nd year of daycare business. I have always efiled my taxes using the "Free File Fillable Forms" from IRS.gov. It basically is just filling in the blanks and does no tax work for you. This method will not allow a statement to be attached.

This year i have a couch purchase of $2456.34 and a Chair purchase of $545.85.

T/S% is 29%

Schedule C, line 27a will read:
"Furniture $870.64

I assume I will need a safe harbor statement. Am I correct?

Is there another efile/"just fill in the form" method that will allow me to attach a statement? Should i just mail in the paper tax forms? is there any reason to efile rather than mail in tax forms other than delay in refund?

That is the correct deduction and you should attach the safe harbor statement to your tax return. If doing efile doesn't automatically attach this statement then you should mail it in. The benefit of efiling is you get your tax return faster.

[SherriW]

Thanks, Tom! Couldnt do my own taxes without your workbook and this forum!

One more question...I came across this on the IRS.gov website.." the basis of property you buy is its cost plus amounts you paid for items such as sales tax, freight charges, and installation and testing fees." Does this mean i can include in the cost of the couch the delivery fee of $135?

Also is the extended warranty of $199 I purchased for this couch also deductible? If so, where does it get deducted?

[TomCopeland]

sales tax

Thanks, Tom! Couldnt do my own taxes without your workbook and this forum!

One more question...I came across this on the IRS.gov website.." the basis of property you buy is its cost plus amounts you paid for items such as sales tax, freight charges, and installation and testing fees." Does this mean i can include in the cost of the couch the delivery fee of $135?

Also is the extended warranty of $199 I purchased for this couch also deductible? If so, where does it get deducted?

Yes, the delivery fee and warranty should be included in the cost of the couch and deducted on Schedule C, line 27a as an Other Expense. Call it "Furniture."