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office equipment vs office supply

Posted on 2010-09-21
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Last Modified: 2013-12-11
Hi

How can differentiate office equipment vs office supply.
We are trying to reorganize our quickbooks accounts but looks like they been using either one in the past.
Should be a rule
for example
keyboard should it be an office supply or office equipment,
is the a minimun price rule or how can we do this
please explain

thanks
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Question by:titorober23
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by:SBA_Services_AZ
SBA_Services_AZ earned 125 total points
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You should really check with your Tax Professional for this. (I am NOT a CPA)

When setting up QB, I typically suggest to my clients to think of a Supply as anything that you use, deplete and re-order. So, for your example, a Keyboard would be Equipment as it is not depleted when used. Batteries to go into a wireless keyboard however, would be a Supply.
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by:titorober23
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That's how i think about it.
But i heard about  a rule that if you spend more than $500 for single supply it becomes an equipment.
please comment
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by:SBA_Services_AZ
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technically it would be an Office Equipment Asset if a SINGLE item costs more than $500.00.  With that being said, it really depends on the bottom line whether you take a Section 179 deduction in the current year for the full amount or depreciate it.  

I suggest creating an expense account called Equipment Purchased and any office equipment – printers, computers, etc – go there.  Then my accountant makes the decision at the end of the year whether to depreciate it or leave it as an expense, but at least everything is in one account.

Not many actual supply items would cost that much so you would still need to keep the use, deplete, re-order part in mind as well.

There will always be "one off's" that can't be cover in general questions. This is why I suggest working with a tax professional/accountant for those types of questions.
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by:titorober23
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items that cost more than $300 or $500 are most likely equipments, I am asking if there is a rule to differenciate one from the other.
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SBA_Services_AZ earned 125 total points
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Other than the information I have already provided, the are no "rules" to separate supplies vs equipment. If you are looking to set something up for your business and don't feel those are enough to go by, then again, talk to your tax professional.
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by:titorober23
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thanks
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