Taxes and iPod Touch?

[Dan Shallenberger]

Would it be feasible to write off an ipod touch or ipod video? I would use it for personal uses to some degree, but my primary reason for getting one would be to display and show my sample videos and photography... a beautiful and functional portable demo reel.

I wrote off my cameras even though I occasionally use them for personal video recording (rare, but it happens).

[Peter Wiley]

It's possible if you use the iPod more than 50% of the time for business and can substantiate the use.

http://findarticles.com/p/articles/m...10/ai_13879037

[Boyd Ostroff]

That's not a bad article, but I think this is the paragraph you should be looking at:

Once you try to deduct the cost of tape recorders, telephones, and the like that are of mixed use, you subject yourself to more pages of IRS formulas and tables than I could satisfactorily explain here. Suffice it to say, the best answer is to keep your computer and electronic equipment exclusively in your business.

Personally I wouldn't want to claim an ipod was needed for business, seems like a big red flag to wave, and as that article points out it could open the door to closer scrutinization of your whole return. And do you intend to keep a log showing how many hours you used your iPod for personal vs business?

Do you have an accountant? You should really ask them instead of us. I know my accountant would strongly advise against such a thing.

[Jim Andrada]

You'd probably get less pushback if you got the iPhone - it's easier to claim a cell phone is business related. Especially if you have more than one cell phone.

[Dylan Couper]

I asked my accountant. He said yes. However, I'm a corporation so it might be different.

[Chris Davis]

Generally the advice you'll get from accountants is: If you use it for business, deduct it. Plain and simple.

Nobody goes to jail for taking a bad deduction. At worst, you'll be required to pay the tax you would have had you not taken the deduction. I wouldn't worry about one piece of equipment setting off an audit.

[Jim Andrada]

You might also have to pay interest on the underpaid amount, but for the price of an iPod - not a big deal. I wouldn't worry about it. Beside the IRS charges just about the lowest interest rates around

I once had an IRS audit that lasted 6 months - absolutely horrible experience. Nothing set it off, they just pulled 3 returns at random to use as a training exercise for the auditor.

I did learn a lot from it. I was claiming the lease payments on my car as a business expense and the car along with the logs showing each business usage was long gone by the time they started to audit I had a little voice recorder that I used to use when picking up clients etc and I found it. It was old and not really functional but you could sort of make out one or two entries. The IRS accepted it as sufficient evidence of business usage because it demonstrated that I had a formal method for tracking business use, not just a guess. The fact that my wife and I had two other cars also helped demonstrate the business use intent for the (really nice) 3rd car. Point of all this is that reasonable evidence of business use can save the day.

Do you claim business mileage for getting to and from paying jobs? In the US you can claim it.

[Dan Shallenberger]

Thanks all for your responses. This has been really informative. I didn't end up getting the iPod touch in '07, so it doesn't matter now for the upcoming tax season. But, I'll be getting one after MacWorld sometime, depending on whether or not they upgrade it.

I do claim my mileage as a deduction. Right now, I'm keeping track of miles in iCal by documenting the total mileage of the trip (home to brides house to church to reception to home, etc). I'm not keeping track of it as actual miles on the car (like 22,840 to 22,954 for a wedding). Should I be keeping track as actual odometer readings versus just number of miles for each wedding?

Regarding writing off car/lease payments, my wife says we can. But, I'm not sure. We only have two cars and I only use mine for business driving, but we use both for personal driving. I asked 3 accountants and all 3 gave me different answers.

Thanks,
Dan

[Jim Andrada]

I used to just keep track of miles, not starting and ending mileage

[Ethan Cooper]

I was told that you can deduct something like $0.40/per mile of business use. Just keep track of business mileage vs non-business. We keep a log in the car and write down all business mileage.

Ask 5 people a tax question, get 5 different answers. That's usually how it goes.

[Dan Shallenberger]

Originally Posted by Ethan Cooper

Ask 5 people a tax question, get 5 different answers. That's usually how it goes.

Got that right! I'm going with Chris Davis... we won't be going to jail over the little things like this. I need to find a good, well-recommended accountant, see what they say and just trust them.

Thanks for all the thoughts and insight!

Later,
Dan