If you've been eyeing those sleek new iPods, but you didn't like the price tag, Uncle Same wants to help you buy one. Before I go on, here's the standard CYA... I'm providing this as information only. It's up to you and your tax professional to figure out if this is indeed a legitimate tax strategy for you. Now on with the show... There are two principles at work here: 1) You have the right to deduct reasonable and necessary business expenses from your income before calculating tax on that income. 2) Continuing education to improve your business results has long been recognized as a reasonable and necessary expense. So where does that shiny new iPod fit in? If you're like me, you have many hours of mp3 recordings on your hard drive-- recorded conference calls, teleseminars, webcasts and other educational materials. I know I have well over 100 hours of such material on my hard drive. There are also an increasing number of podcasts available dealing with business topics. Listening to those relevant to your business contributes to your ongoing business education. There are also similar offerings on subjects like investing, tax planning, and so on. Purchase your iPod through your business, and you can expense the total cost the year you buy it. How's this for leverage? You (meaning your business) spends $200 for a new iPod. You write off the entire cost this year, reducing your taxable income by $200. You load up that 4 hour webinar you've been meaning to get around to, and listen while commuting. You learn something that adds $200 to your bottom line immediately. Congratulations! You just got your iPod for zero net cost. And the iPod is so small and light that you can leverage a lot of dead time (commuting, waiting in line, workouts at the gym, etc.) into productive continuing business education. And it even plays music! Music to help you concentrate while writing that new article or newsletter. Making that music a deduction on its own. As one guru said, the proper question is not "Can I deduct this?" The proper question is "How can I deduct this?" |
