I had posted in the Q&A section and was advised that I should have posted here instead. (Lets see if forum link works)
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While I’m not a tax expert, a quick google search brings this up: http://www.section179.org/section_179_faqs.html
Section 179 of the IRS Tax Code allows a business to deduct, for the current tax year, the full purchase price of financed or leased equipment and off-the-shelf software that qualifies for the deduction. The equipment purchased, financed or leased must be within the specified dollar limits of Section 179, and the equipment must be placed into service in the same tax year that the deduction is being taken (for example, the equipment must be put into service between January 1st and December 31st of the year the deduction is to be taken.)
So it looks like you can’t deduct until you get the Glowforge and start using it for business purposes.
I have an accountant that has done my residential income taxes for many years, when I had spoken to him on a phone call, he had advised me to get the invoice information and any other business purpose reciepts for my relative endeavors this year to launch my startup. As the GF was a major expense, wanted to get all them ducks in a row before I had a sit down with him.
Given THAT information, my accountant may not have understanding that specific clause to this situation just from a phone convo.
Still, would be pretty nifty to know if GF concurrs with that being the course of action or if they had other specific plans.
While it doesn’t qualify for a Section 179 write-off it does affect your equity position because you are effectively funding the startup. There are a bunch of different rules about how startup funding is treated so that’s something your accountant can talk to you about. But if you used a credit card or a loan to pay for the GF make sure you include whatever interest you paid as well since that’s part of the valuation basis.
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We can’t give tax advice, but if you need a receipt, shoot an email to support@ and the team there can get you set. (not sure I understand what you needed correctly, though).
Yep, just need an invoice or reciept of payment for the intended product.
I have not had a chance to discuss this with my accountant yet but I did just ask someone I trust for business advice (someone who has run a business for over 40 years). My Glowforge was paid for by my small part-time side business. He suggested I record the purchase as a deposit. That will have no tax implications in 2015. When the Glowforge arrives, I will then move it from a deposit to a fixed asset and tax implications including depreciation start at that time. I’ll confirm this with my accountant soon. And what’s right for me is not necessarily right for anyone else’s situation.
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John - Thanks for that tip! I’ll have to ask my accountant about it. Hopefully, it’s a good workaround until next year when I can depreciate the Glowforge as a 179 deduction.
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