How much special depreciation allowance for laptop must be deducted for tax purposes?

For your laptop, you actually have several options for deducting it as a business asset. Since it's used 80% for business, only that portion ($2,240 based on your $2,800 purchase) is eligible for business deductions. Your main options are: 1) Regular depreciation over 5 years, 2) Section 179 deduction, or 3) Bonus depreciation (which is the "special depreciation allowance" your accountant mentioned). With Section 179, you can deduct the full business portion in the first year. Bonus depreciation also allows for immediate expensing, but there are some technical differences between the two. The benefit of taking Section 179 or bonus depreciation is getting the full business deduction upfront, which might be advantageous if you had a profitable year. The traditional 5-year depreciation spreads the deduction out, which might be better if you expect higher income in future years.

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One thing nobody's mentioned yet - if your laptop is less than $2,500, you might be able to use the de minimis safe harbor election and just deduct the whole business portion immediately without dealing with any depreciation methods at all! It's on page 19 of the IRS Publication 535.

Has anyone here actually been audited over depreciation issues? I've been using my "best guess" for business use percentage of my computer for years (about 75%) but don't really have detailed logs to back it up. Starting to worry if that's a red flag.

Just wanted to add something important that might help - the IRS requires "contemporaneous records" for business use claims, which means you should be tracking your laptop usage as it happens, not reconstructing it later. I learned this the hard way when my CPA told me my retroactive estimates wouldn't hold up well in an audit. For laptops and other mixed-use equipment, I now keep a simple spreadsheet noting dates, hours used for business vs personal, and what type of work I did. Takes maybe 2 minutes a day but gives you solid documentation. The IRS Publication 463 has specific guidance on what constitutes adequate records for business use of listed property (which includes computers). Also worth noting - if your business use ever drops below 50% in any year during the depreciation period, you may have to "recapture" some of the accelerated depreciation you took in earlier years. So if you're on the borderline with that 80% figure, definitely keep detailed logs to protect yourself.