I’m considering donating a Biolase Waterlase laser to my old dental school. I spoke to my accountant and he said that since my S-Corp already took a deduction on the purchase and the equipment is fully depreciated I cannot deduct the donation off my Corp return. If I take the laser out of the S-Corp, I would have to pay tax on the current value of the laser before I could donate it. Is there any way around this? It seems I am between a rock and a hard place in trying to donate a piece of equipment I rarely use and get a deduction on it. Thanks.
The accountant is correct. Think about it: do you think you should be able to deduct MORE than the cost of the equipment? Or, how many times should you be able to deduct the cost of a piece of equipment?
I know my accountant is correct. It’s just funny because I hear on occasion that people donate unused equipment and take a deduction they probably are not entitled to.
No doubt this happens. I just reviewed a 2008 return for a dentist where they took a deduction for “business attire” for approximately $2,300. I figured uniformsscrubsdry cleaning; however, I hate to assume, so I asked. It seems as though he was told he could write off most of his clothes he wears to work…
…and to think I’ve been missing out on that deduction for 26 years now
…I wear dress shirts etc. I asked my tax guy if I could deduct that and he says that I can.
Dress shirts are not “uniforms”. If you read the code it says that if the clothing is “adaptable” to street use they are not deductible.
For example, the overalls an auto mechanic might wear that have the company name and the mechanic’s name on it would almost certainly be deductible as these are not the type of clothes they would go out on a Friday night wearing. Whereas your dress shirt is likely something you can wear out on a Friday night and therefore not deductible.
I’m certain you aren’t the only one deducting dress shirts. That doesn’t make it deductible though. I wonder if your tax guy deducts the clothes they wear to work.
I buy clothes maybe a couple times a year. Now if you really liked clothes (e.g. a woman who buys shoes and clothes all the time), then I’m sure that would be a different story.
Nope, it doesn’t make a bit of difference. Whether you buy $50 of dress shirts or $5,000 of dresses and shoes, if they are adaptable to street use the code says they are not deductible. They don’t assign a dollar figure to the deduction.
In the end though you should do what you’re comfortable with and trust your “tax guys’” advice.
What if he wears those clothes to work as uniform? Is he still entitled for the deduction?
If they are indeed “uniforms”, yes.
Clothes you can buy at Macys without practice namelogo are not considered “uniforms”.
Interesting Tim. I give all my staff $150 for uniform allowance once a year, including the front office staff. I would send them the store and reimburse them with a receipt. These are clothes that they may have bought a Macy. I want the front desk to look nice because they are a reflection of the practice. Will these clothing be deductible?
As long as you slap your practice name and logo on them and call it a uniform….otherwise wouldn’t we all LOVE to deduct our business clothing…suits, dress shoes, belts, etc?