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Computer Software Deduction

Computer SoftwareThe general rule for business software says you must depreciate costs over 36 months. But there are some exceptions you can take advantage of. Specifically:

  1. When software is bundled with hardware and sold for a single price, you can treat the whole setup as a new computer. Then you may be able to take a Section 179 deduction for the entire cost.
  2. Some software programs, such as tax preparation packages, are really in the nature of  subscription products. These should be treated as “abandoned” and written off as soon as  they lose their usefulness. If a program will be good only for one year, deduct the entire cost in the year of acquisition.
  3. Even if you are stuck with the 36 month rule, you can acquire software this year, you can  claim first – year bonus depreciation equal to 30% of the cost. The remaining cost then can  be written off over 36 months.


If you have any questions or require further info please call 718-531-1105 or send an email.


This web site and these articles are not tax or legal advice and are not intended as tax or legal advice.  They are intended to provide only general, non-specific legal information and are not intended to cover all the issues related to the topic discussed.  The specific facts that apply to your matter may make the outcome different than would be anticipated by you.  This web site and these articles are based on United States law.  You should consult with an accountant or lawyer familiar with the issues. This web site and the articles contained on this web site are not solicitations.

Contact Info:

Ronald Semaria
Semaria Consulting
1408 East 66th St
Brooklyn, NY 11234
Email: info@semaria.com

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Phone: 718-531-1105
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