How to Claim Depreciation on a Personal Computer for Marketing

A personal computer used for marketing activities can be a source of tax deductions. The tax code allows you to recover an asset’s cost over time through depreciation, which accounts for the fact that assets like computers wear out or become obsolete. For business owners, this means a portion of the computer’s cost can be subtracted from business income each year, lowering the overall tax liability. There are several methods for calculating this deduction, each with its own rules.

Determining the Business Use of Your Computer

The Internal Revenue Service (IRS) requires you to distinguish between business and personal use for any asset. While computers are no longer classified as “listed property,” you are still required to maintain detailed records if the computer is used for both business and personal activities. This is because you can only deduct the portion of the cost related to its business use. To substantiate your deduction, you must maintain a logbook or spreadsheet that tracks the date, time, and purpose of each use.

Calculating the business-use percentage is a direct outcome of this tracking. You must determine the total amount of time you used the computer during the year and what portion of that time was for business-related marketing tasks. For example, if you used your computer for a total of 1,000 hours and 800 of those hours were for business, your business-use percentage is 80%.

The business-use percentage also dictates which depreciation methods are available to you. If your business use is more than 50%, you can choose from several accelerated deduction methods. Should your business use fall to 50% or less, your options become more restricted. In that scenario, you are limited to deducting the business portion of the computer’s cost evenly over several years using straight-line depreciation.

Methods for Deducting Your Computer

When your computer is used more than 50% for business, one option is the Section 179 deduction. This provision allows you to treat the cost of the business-use portion of the computer as an expense and deduct it all in the year you start using it. For example, if your computer cost $2,000 and you use it 80% for business, you could deduct $1,600 in the first year.

For 2025, the total amount you can deduct under Section 179 is capped at $1,250,000 on up to $3,130,000 of equipment purchases. The deduction also cannot exceed your net taxable business income for the year.

Another method for an immediate deduction is bonus depreciation. For property placed in service in 2025, it allows you to deduct 40% of the business cost in the first year. Unlike Section 179, bonus depreciation is not limited by your business income, which can be an advantage if your business has a net loss. The percentage for bonus depreciation is scheduled to decrease in subsequent years.

The standard method for deducting an asset’s cost over time is the Modified Accelerated Cost Recovery System (MACRS). This system spreads the deduction over the asset’s designated recovery period. For computers, the recovery period under the General Depreciation System (GDS) is five years. MACRS allows for larger deductions in the earlier years and smaller ones in the later years, accelerating the tax benefit compared to a straight-line method.

Information Needed to Claim the Deduction

To properly claim a deduction for your computer, you must gather specific information. The first is the computer’s cost basis, which is the amount you paid for the equipment, including any sales tax, shipping, and installation fees. You will also need the exact date the computer was “placed in service,” meaning the date it was ready for business use, not necessarily the purchase date. This date determines the tax year you can begin claiming depreciation.

You will also need the business-use percentage that you calculated by tracking your usage. This percentage is applied to the computer’s cost basis to determine the depreciable amount. Finally, you must decide which deduction method you will use, whether it’s Section 179, bonus depreciation, or MACRS. The choice of method will depend on your business income and your need for a current-year deduction.

This information is reported on IRS Form 4562, Depreciation and Amortization. If you elect the Section 179 deduction, you will complete Part I of the form. For MACRS depreciation, you will use Part III. Part V of the form is where you list the computer as an asset, providing a description, the date it was placed in service, its cost, and the business-use percentage.

Reporting the Deduction on Your Tax Return

After you have completed Form 4562 and calculated the final deduction amount, the next step is to transfer that figure to your main business tax return. For a sole proprietor or single-member LLC, this amount is reported on the “Depreciation and Section 179 expense deduction” line of Schedule C (Form 1040). For other business structures, such as a corporation or partnership, the deduction is reported on the corresponding line of Form 1120 or Form 1065.

The completed Form 4562 must be attached to your tax return when you file. If you are filing electronically using tax software, the program will generate and attach the form for you based on the asset information you enter. If you are filing by mail, you will need to print and include the physical form with your return.

Proper record-keeping does not end after you file. You should retain all documents related to the computer purchase and its business use for at least three years from the date you file your tax return. This includes the original purchase receipt, bank or credit card statements, and the detailed logs you kept to prove your business-use percentage. These records are necessary to support your deduction in the event of an IRS audit.