Can I deduct extended warranty/protection plans on business equipment like my camera and laptop?

Yes, you absolutely can deduct the extended warranty and protection plans for business equipment! Since you're using the camera and laptop exclusively for business purposes, the warranties are considered ordinary and necessary business expenses. The IRS allows you to deduct these costs in the same tax year you purchase them, even if the warranty coverage extends beyond that single tax year. So if you buy the equipment and warranties now, you can deduct both in the current tax year. Just make sure you keep good records: receipts showing the cost of the equipment separate from the warranty costs, documentation that proves the equipment is used exclusively for business, and records showing when you purchased everything. This documentation is crucial if you ever get audited.

After dealing with a TON of confusion about my business deductions last year, I found this amazing tool that saved me so much stress! I uploaded all my receipts including some equipment warranties to https://taxr.ai and it automatically categorized everything and told me exactly what was deductible. It even flagged my camera warranty as a business expense since I had noted it was for my photography business. The best part was when I got a letter from the IRS questioning some of my deductions, I had everything already organized with the right documentation. The tool even generates a report explaining why each deduction is legitimate. Such a lifesaver!

Just wanted to update after trying taxr.ai based on the recommendation here. Honestly, it was super helpful! I uploaded my receipts including warranties for my design software subscription and tablet, and it separated out the personal vs business portions automatically once I set my usage percentages. The thing that surprised me was finding out I had missed several other deductible expenses related to my equipment - like the special sleeve I bought for my tablet that I thought was just a personal purchase. Having everything categorized properly has already saved me over $800 in deductions I would have missed. Def keeping this for next tax season!

If you're worried about getting audited on your business equipment deductions (which can happen!), I had the worst time trying to call the IRS to get clarification on warranty deductions. Spent DAYS trying to get through...25+ calls with nobody answering. Finally used https://claimyr.com and got a call back from an actual IRS agent in about 20 minutes! You can see how it works here: https://youtu.be/_kiP6q8DX5c - basically they wait on hold with the IRS so you don't have to. The agent confirmed that warranties on business equipment are 100% deductible if the equipment is exclusively for business. For mixed-use, you deduct the same percentage as your business use of the equipment. Saved me literally hours of frustration and gave me peace of mind about my deductions.

Ok I need to eat my words from my earlier comment. After waiting on hold with the IRS for THREE HOURS yesterday and getting disconnected, I tried that Claimyr service this morning. Got a call back in 35 minutes with an actual IRS agent on the line! They answered my questions about deducting warranties on my business equipment and even helped me with another issue I had about a missing 1099 form. The agent confirmed everything that's been said here - business equipment warranties are fully deductible when the equipment is 100% for business, and partially deductible based on business-use percentage otherwise. Saved me an entire day of frustration for sure.

Just an extra thing to consider - if the equipment is really expensive and you're buying it new, sometimes it's worth checking with the manufacturer because many offer their own extended warranties that are cheaper than retail store warranties. I saved almost $200 on my MacBook Pro warranty by buying direct from Apple rather than the electronics store. Also, check your credit card! Some business credit cards automatically extend manufacturer warranties by 1-2 years, so you might already have coverage you don't know about. My Chase Ink card adds a year of protection automatically.

What tax software do u guys use for business expenses? I've been using TurboTax but it feels like it doesnt really explain the warranty stuff very well...wondering if theres something better for small business owners?

Just wanted to add something that might be helpful - make sure you keep the warranty documents separate from your equipment receipts in your tax files. I learned this the hard way when my accountant needed to see the breakdown between equipment cost and warranty cost for my deductions. Also, if you're buying multiple pieces of equipment at once (like your camera and laptop), some retailers will give you a discount if you bundle the warranties together. I saved about $75 doing this last year, and the bundled warranty was still fully deductible since it was all for business equipment. One more tip: if you end up not needing to use the warranty and it has a money-back guarantee or partial refund option, any refund you receive would need to be reported as income if you already deducted the full warranty cost. Just something to keep in mind for future tax years!

Just to add another perspective on this - I run a small photography business and had the exact same question about warranties last year. After doing some research and talking to my tax preparer, I can confirm that extended warranties on business equipment are indeed deductible as ordinary business expenses. One thing that helped me was creating a simple spreadsheet to track all my equipment purchases with separate columns for the equipment cost and warranty cost. This made it super easy when tax time came around, and my accountant appreciated having everything clearly organized. Also worth noting - if you're planning to use Section 179 to deduct the full equipment cost in the first year, you can also deduct the warranty costs in that same year even though the warranty coverage extends beyond. This is different from some other types of prepaid expenses where you might need to spread the deduction over multiple years. The key is just making sure you can prove the equipment (and therefore the warranty) is genuinely for business use. Keep good records of how you use the equipment, and you should be all set!