Many self-employed taxpayers can deduct equipment purchases rather than capitalize them under Section 179 of the tax code. Under the Economic Stimulus act of 2008, you could elect to deduct up to $250,000 worth of capital expenditures. The American Recovery and Reinvestment Act preserved this higher write-off for 2009. It applies to most business assets, including home office computers and furniture. For 2010, the maximum drops to $125,000.
For example, if you spend $25,000 on such items and they’re used strictly for business, you scan take an immediate $25,000 deduction. If those items were used 60 percent for business, you can take a $15,000 deduction.
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