I have a storage organizer that I paid $109.99 for in April 2023. I am claiming this as an asset for my sole proprietorship. I'm using the MACRS 200% Declining Balance method of depreciation with a 7 year asset life. This organizer qualifies for the special depreciation allowance of 80% since it was purchased between January 1, 2023 and January 1, 2024. What portion should I deduct as an expense using the Section 179 expense election?

The Section 179 deduction allows you to elect to deduct the cost of certain types of property on your income taxes as an expense, rather than requiring the cost to be capitalized and depreciated. This can be advantageous for small businesses because it provides an immediate expense deduction that can reduce taxable income. For the storage organizer you purchased for $109.99, you can elect to deduct the full purchase price under Section 179, assuming your business income is sufficient to absorb the deduction and you haven't exceeded the Section 179 deduction limits for the tax year. However, since you mentioned that the organizer qualifies for the special depreciation allowance of 80%, you need to decide whether to use the special depreciation allowance or the Section 179 deduction, as the two cannot be used simultaneously on the same portion of the asset's cost. If you choose to use the special depreciation allowance, you would deduct 80% of the cost of the organizer in the first year, which would be $87.99 (80% of $109.99). The remaining 20% of the cost, or $22.00, would then be depreciated under the MACRS 200% Declining Balance method over the 7-year asset life. Alternatively, if you elect to take the Section 179 deduction, you could potentially deduct the entire cost of $109.99 in the year of purchase, provided your business income is sufficient to cover the deduction and you haven't exceeded the Section 179 limits. It's important

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