Just curious about expensing ATX software

[jklcpa]

Just curious whether you are deducting the annual cost of the ATX software yearly, or are you recording it as 3-year off-the-shelf software and depreciating since it is available to use for as long as it will run on your computers.

[Gail in Virginia]

We deduct it annually. Even though it will run indefinitely on our computers, the main use of it is in one year, and it must be replaced every year (if not with ATX, at least with some tax product.)

[Kea]

Same here.

As an added note, I deduct it for the year I use it (later of date purchased or put in service). Granted, I do sometimes install and test in late December but I still show the deduction in the year of primary use.

[jklcpa]

I deduct it each year too, but I was curious if anyone was capitalizing it.

[Jack from Ohio]

Deduct all in the year purchased.

[mcb39]

I deduct it in the year of purchase. For all intents and purposes; it is "used up" each tax year. I use cash method acctg for my business and clearly list it on the Sch C as Tax Prep Software.

[ILLMAS]

Software expense each year

[GeneInAlabama]

>>clearly list it on the Sch C as Tax Prep Software.<<

This is a good idea. I have been listing it under office expense but I will start listing it separately from now on.

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[joanmcq]

I used to depreciate it, but started expensing at least 5 years ago.

[Lion EA]

Expense it as an annual license.

[Pacun]

I expense it on the year I pay for it. I am always late, so I never purchase two in the same year.

[Terry O]

I do the same - - write it off each year - - clearly mark Tax Prep software on Schedule C since it is a rather large amount.