Can You Write Off a Laptop for Work on Your Taxes?

A laptop is a common tool in today’s work environment, leading many individuals to wonder if they can deduct its cost on their taxes. While deducting a work-related laptop is possible, the specific rules and eligibility criteria depend on several factors. Understanding these tax provisions is important. This article clarifies the circumstances under which a laptop may qualify as a deductible business expense, outlining the methods available for claiming it and the necessary documentation.

Eligibility for Business Expense Deduction

Eligibility to deduct the cost of a work laptop primarily depends on an individual’s employment status. Self-employed individuals, such as freelancers, independent contractors, or small business owners operating as sole proprietors, generally have the most straightforward path to claiming this deduction. For these taxpayers, a laptop is considered an ordinary and necessary business expense, meaning it is common and accepted in their trade or business, and helpful and appropriate for conducting their work activities. These expenses are directly related to generating business income and are not considered lavish or extravagant.

The landscape for employees, however, is different due to changes enacted by the Tax Cuts and Jobs Act (TCJA) of 2017. This legislation suspended the deduction for unreimbursed employee business expenses as a miscellaneous itemized deduction from 2018 through the end of 2025. Consequently, most employees cannot deduct the cost of a work laptop, even if their employer does not reimburse them for the expense. This suspension means that an employee who pays for a laptop out-of-pocket for their job, without reimbursement, typically cannot claim that cost on their federal tax return.

While the federal deduction for most unreimbursed employee expenses is suspended, rare exceptions exist. These might include specific professions, such as qualified performing artists, fee-basis government officials, or individuals with disabilities who incur impairment-related work expenses. Additionally, some states may have their own tax laws that permit deductions for unreimbursed employee business expenses, irrespective of federal rules. Regardless of employment status, a fundamental requirement for any laptop deduction is that the equipment must be used for a business purpose and not primarily for personal use.

Qualifying Costs and Deduction Methods

Once eligibility is established, understanding what specific costs qualify and how to deduct them becomes the next step. The direct purchase price of the laptop itself is deductible, which includes the base cost, sales tax, shipping fees, and any necessary setup charges. Beyond the laptop, several associated expenses can also be included in the deduction. These often encompass software essential for business operations, such as operating systems, office suites, or specialized industry-specific applications.

Peripherals and accessories that enhance the laptop’s functionality for work also qualify. This can include external monitors, keyboards, mice, docking stations, webcams, and protective cases. If internet service is directly attributable to business use, particularly for individuals operating a home office, a portion of these costs may also be deductible.

Several methods are available for deducting the cost of a business laptop, offering flexibility based on the asset’s cost and business needs. For smaller purchases, businesses may opt for the de minimis safe harbor election, allowing immediate expensing of items costing $2,500 or less per item or per invoice. This method is available if the business has an applicable financial statement or elects the safe harbor.

For more substantial investments, Section 179 of the IRS tax code provides a significant benefit. This provision allows businesses to deduct the full purchase price of qualifying equipment, including new and used laptops, in the year it is placed in service, rather than depreciating it over several years. For 2025, the maximum Section 179 deduction is $1,250,000, though this amount begins to phase out dollar-for-dollar once total eligible purchases exceed $3,130,000, and is completely phased out at $4,380,000.

Another powerful deduction method is bonus depreciation. While previously scheduled to phase down to 40% for 2025, a new law, effective for qualified property acquired and placed in service after January 19, 2025, permanently reinstates 100% bonus depreciation. This allows businesses to deduct the entire cost of new or used qualified business property in the year it is placed in service. If a laptop’s cost is not fully expensed through Section 179 or bonus depreciation, its cost must be depreciated over its useful life, typically five years for computer equipment. Depreciation spreads the deduction across multiple years, recognizing the asset’s gradual wear and tear.

Documentation and Tax Reporting

Meticulous record-keeping is paramount when deducting a work laptop and related expenses. Taxpayers must retain robust documentation to substantiate their claims in the event of an IRS inquiry. Essential records include purchase receipts or invoices, clearly showing the date of purchase, the vendor, a description of the item, and its cost. Proof of payment, such as bank statements or credit card records, should also be kept.

Beyond purchase details, taxpayers need to maintain records demonstrating the laptop’s business use. This could involve logs, calendars, or detailed explanations outlining how the laptop is utilized for business activities. If the laptop serves both business and personal purposes, documentation supporting the percentage of business use is critical, as only that portion is deductible.

For self-employed individuals, these business expenses are reported on Schedule C (Form 1040), Profit or Loss from Business. The cost of the laptop might be entered under “Supplies” if treated as a smaller expense, or under “Depreciation and Amortization” if expensed through Section 179, bonus depreciation, or traditional depreciation. This form consolidates all business income and expenses to determine net profit or loss.

In the rare instances where an employee can deduct such expenses, typically under specific federal exceptions or state laws, the deduction would usually be reported on Schedule A (Form 1040), Itemized Deductions. These miscellaneous itemized deductions were historically subject to a 2% adjusted gross income (AGI) limitation, meaning only the amount exceeding 2% of the taxpayer’s AGI was deductible. While the federal deduction is suspended for most employees through 2025, understanding where such deductions would appear remains relevant for the few exceptions.

Navigating Specific Scenarios

Many taxpayers use their laptops for both professional and personal activities, necessitating careful attention to mixed business and personal use. If a laptop is utilized for both purposes, only the percentage of its cost directly attributable to business use is deductible. To accurately determine and substantiate this percentage, taxpayers should maintain detailed records, such as usage logs or a clear method for tracking time spent on business versus personal tasks. This documentation is essential to justify the claimed deduction.

Employer reimbursement also impacts an employee’s ability to deduct a laptop. If an employer fully reimburses an employee for the cost of a laptop, the employee generally cannot claim a deduction for that expense, as they did not incur the cost out-of-pocket. It is important to distinguish between accountable and non-accountable reimbursement plans. Under an accountable plan, reimbursements are not considered taxable income to the employee if they meet specific IRS criteria: business connection, adequate accounting, and return of any excess amounts. Conversely, reimbursements made under a non-accountable plan are treated as taxable wages to the employee.

The tax implications of a business laptop can extend beyond its initial purchase. If a business laptop that was fully or partially depreciated is later sold or disposed of, tax consequences may arise, potentially resulting in a taxable gain or loss. This depends on the sale price relative to the laptop’s adjusted basis (original cost minus claimed depreciation). It is important to note that used laptops can also qualify for deduction, subject to the same rules and requirements as new equipment, provided they are used for business purposes.