I just bought new equipment for my business. Can these expenses be used on my tax return?

Answer: The new equipment costs will benefit the business for a number of years, making them a capital expenditure. Capital expenditures can not be expensed immediately, but rather must be depreciated over future years. An exemption does exist and equipment costs can often be expensed right away.

Example: A taxpayer spends $10,000 on new equipment for his business. The entire $10,000 can be expensed right away, but because of tax planning reasons the taxpayer chooses to depreciate the cost of the equipment over the next five years.