to amortize or not to amortize?

Question

I have been paying a CPA to do my taxes for 4 years and she has been amortizing an amount of $3,916 per year on a $50,000 course that I bought for my business in 2015. Do I need to do this as well? I am not even sure why she picked that amount each year.

Michael Plaks · Answer

@Rochelle Durieux

What do you mean - should you be doing it? Did you decide to do it yourself?

Look for form 4562 on your 2015 tax return. It should give you details on how much was set up for amortization (or depreciation, they're similar) and for how many years. Share with us these details if you want to. You should continue that pattern for the elected number of years, most likely.

Kory Reynolds · Answer

Without more information hard to say. Potentially there are some other items involved and she is treating it as start up costs? I would need to talk through the circumstances to see if that would be defensible, but not sure I necessarily agree offhand. If you were already in the trade or business and this was ongoing training, then no reason to capitalize - it would have been expensed.

Perhaps provide the forum with a bit more information - when the business started, how it relates to the training, what other start up costs may have been incurred. Details as it comes to tax law are ever so important - a common answer very well can be "it depends" until you can provide more information.