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Step 1
Determine which category your equipment falls under. The Federal government allows businesses to depreciate equipment in three ways. You can depreciate your personal property that has been converted for use in your business, furniture and equipment or property bought specifically for the business.
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Step 2
Go to the IRS website (www.irs.gov) and review publication number 946 "How to Depreciate Property."
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Step 3
Keep records to justify your deductions. Your equipment, property or furniture begins to depreciate from the first day you use it up until 5 or 7 years later. Things such as calculators, computers, typewriters and other office equipment are depreciated over a 5-year period while larger items such as desks and furniture depreciate over a seven-year period. You want to keep good records of your purchases and dates the equipment was put into use in the event the IRS audits your Federal taxes.
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Step 4
Itemize your Federal tax deductions. To claim the depreciation on your taxes you cannot file the short form. You have to file an itemized tax form.
