Is an IPad or other tablet computer deductible as a business expense? I just bought an IPad to use when I travel for business, and I wanted to make sure it is deductible. The answer, as always, is "it depends."
IPads as Listed Property
An IPad, like other tablet computers, is considered listed property. The IRS has a special category of equipment that businesses purchase and use, but which can also be used personally. It's a little difficult, for example, to use a milling machine at home, but a car or a computer can be used personally. The IRS doesn't want businesses buying and using these things to read books, play games, or watch videos (although they are great for all of these!) and then attempting to claim a business deduction.
Deducting the IPad
In order to deduct the cost of the IPad as a business expense, you must be able to show that it is used more than 50% for business purposes. So if you're using it for business, don't put games on it, and you should be able to show how you used it for business. For example, if you can show that you only use it when you travel for business and that it's the only computer you take on business trips, you might be able to get the deduction. Keeping careful and detailed records is the key.
Don't forget the expense of Wi-Fi or 4G for your IPad; if you can prove it's being used predominantly for business, you can also deduct the monthly cost of your network as a business expense.
Depreciating Listed Property
If you don't take the cost of an IPad or computer as an expense in the year you buy it, you can depreciate (spread out) the cost over several years. But the same rule applies as for deducting expenses; you must be able to prove that you are using the computer equipment predominantly (over 50%) for business. Read more about Section 179 depreciation to see if you can use this accelerated depreciation method.
Document, Document, Document!
As usual, my mantra is "DOCUMENT!" As soon as you open your IPad and start using it, begin by keeping a log of business activity. Use a simple spreadsheet (they are available for IPad and mobile use) and record hours spent and the business activity. Don't make it complicated; consider it like recording time spent on any activity. Getting in the habit of doing this will pay big dividends if you are ever audited.