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Discussion Forum Index --> Tax Questions --> Tax Software Expenses
Skhyatt (talk|edits) said:
| 31 December 2005
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| Just getting back into preparing taxes after 10 years off. I have a question that may seem obvious, but, I plan on using Lacerte on a "pay per return" basis. Can I just expense those costs as I go? What about the upfront costs for the software. The useful life is less than a year, so I would assume I can just expense that as well? Any feedback greatly appreciated.
skhyatt
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Clr600 (talk|edits) said:
| 31 December 2005
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| Software with a useful life of less than one year can be expensed out in the same year purchased. All ppr fees paid during the year are expenses.
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GET (talk|edits) said:
| 31 December 2005
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| Can that be expensed under 179 deduction?
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Skhyatt (talk|edits) said:
| 31 December 2005
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| I believe it can be taken as a regular expense. Useful life is less than a year.
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JamesGRogersCPA (talk|edits) said:
| December 31, 2005
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| Skhyatt is correct. Normally, software must be amortized over its useful life (another whole debate), but programs such as tax software that must be updated every year can be expensed all in the year the expense is incurred (accural basis) or paid (cash basis).
James G. Rogers CPA
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LJACPA (talk|edits) said:
| 2 January 2006
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| Here's a twist on this, I used pay per return for 2004 returns and ended up spending more than it would have cost had I purchased the unlimited version (ProSeries). So, I purchased the unlimited for 2005, received it in 2005 and started transferring clients in 2005. Any concerns with expensing in 2005 (have I placed it in service???)? BTW, I would tend to capitalize this and depreciate/amortize it (remember that, generally, software is now included as Sec. 179 property - started in 2003, I believe), but I agree that it's not like I can use this again for 2006, I'll have to buy it again, so I'll treat it as a regular expense.LJACPA 12:31, 2 January 2006 (CST)
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DZCPA (talk|edits) said:
| 3 January 2006
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| LJACPA, Write it off when you pay for it if you are on cash basis. Depreciate/amortize an annual software subscription.....keep it simple.
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