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In a few weeks, I will be starting at a position where I will be a contract employee for 30 days and then hired on as a "normal" employee, assuming I meet the expectations of my new employer.

I will be working remotely, so I'd like to purchase a new chair and laptop specifically for the position. If I purchase these during the contract period, can I write them off at tax time?

And a secondary question: I would like to start preparing for this position as soon as possible. If I were to purchase these items in preparation for this new position - as in purchasing them right now - would they be eligible to be written off?

EDIT: Sorry, forgot to mention - I live in California. Not sure if that is relevant.

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    A chair and laptop will need to be depreciated over their lifetime. You can deduct the cost up front on your Schedule C as an expense, but this will have to be recaptured (and you will owe tax) unless you have consulting income in at least two of five consecutive years 2012-2016. Except in rare circumstances, your use of your personal laptop and personal chair are not deductible when you are a W-2 employee. – Dilip Sarwate Jun 29 '12 at 1:40
  • I would at least approach your employer to see if they would be prepared to pay for your chair and laptop. It's normal that an employer pays for things you need to do your job. Maybe they could give you an allowance for setting up a home office. That allowance shouldn't be taxable as long as it's used for legitimate things. – DJClayworth Jul 9 '12 at 16:28
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I doubt that it would withstand examination. I would also mention that if the nature of your work does not change after a month, the fact that you're paid as contractor doesn't make you any less employee during that period.

What you can do is report (some of) these expenses as unreimbursed employee expenses, and they will be deductible based on the AGI limitation, as misc. deductions on your schedule A.

  • It might be difficult to justify a chair and a laptop as an un-reimbursed employee expense unless the employer specifically has said something like "We don't provide you with an office on the premises but require you to work from your home or other offsite location using a computer that you must provide." Sitting on one's own chair and using one's own laptop for one's own convenience does not make it a unreimbursed business expense; it must be for the employer's convenience. And of course, the 2% of AGI threshold will likely be high enough that no deduction will be allowed anyway. – Dilip Sarwate Jun 29 '12 at 11:56
  • @DilipSarwate I didn't say its easy. I said that if there's a possibility - that is it. He will be working remotely, so its not unheard of. – littleadv Jun 29 '12 at 17:12
  • Thanks for the answer! I do believe @DilipSarwate is correct - I don't think that my laptop and chair will cost enough to break the 2% AGI threshold. – Sean Walsh Jul 2 '12 at 17:08

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