Computer Must Meet Two IRS Conditions to Be Tax-Deductible

Question: I work full time and recently bought a home computer that I often use for work-related matters. A co-worker says that, in order for me to write off the computer as a tax deduction, I must have a letter from our employer saying that the computer is a requirement for my job. Is that true, even though the computer is an obvious benefit to me in my work?

--S.G., Long Beach

Answer: Yes. For you to deduct a depreciation expense for a home computer, two rules apply. Use of the computer must be: 1) for the convenience of your employer; and 2) required as a condition of your employment. Though your computer may be helpful for your work assignments, for it to be a tax deduction, it must be a documented requirement of your job.

If the expense is deductible, you must itemize your deductions on Form 1040, Schedule A. It will be taken as a depreciation expense under “employee business expenses.” The deduction will be limited by the percent of business use and subject to the 2% adjusted gross income (AGI) limit.

Remember that there are always exceptions to the general rules. So before you claim such a deduction, I recommend that you consult a tax practitioner or review some of the free IRS publications that deal with this and other employee business expense issues.

To request publications on employee business expenses, depreciation and itemized deductions, call (800) 829-3676. That’s (800) TAX-FORM.

--Judith A. Golden

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Question: I am a manager at a medium-sized manufacturing plant. It seems to me that employee morale is getting worse and worse. Is this a trend, maybe as a result of the recession? Are other companies having the same problems? What can I do to improve morale?

--K.S., Santa Ana

Answer: Job dissatisfaction in an entire company or in a large group of its employees is usually a symptom of an underlying problem. The best way for managers to find out why morale is low is simply to ask.

Of course, employees may not be honest if they fear retribution. And different employees may have different interpretations of what the problem is, so it is important to solicit responses from many people.

One way to evaluate dissatisfaction companywide is with a comprehensive employee attitude survey. If the study is anonymous, people can feel free to speak up and voice their concerns. Some of the available “job satisfaction” surveys ask about all facets of the employee’s job, including attitudes about management, the company’s policies and practices, pay, benefits and the like.

It may be that an anonymous survey would let you know just what is causing the decline in morale.

As for whether low morale might be due to the recession, research that we have done at Cal State Fullerton over the past dozen years indicates that employee satisfaction doesn’t seem to decline during poor economic times. But the reasons for employee satisfaction or dissatisfaction do seem to change.

For instance, during a recession, people become more worried about job security and less concerned with pay raises and benefits. During good times, concern with security decrease and interest in financial rewards goes up.

It is unlikely that your morale problem will simply go away when the economy improves. So what can you do?

The first step is to diagnose the problem. If you don’t do an employee survey, consider setting up complaint-suggestion boxes or arranging other ways to “ask” people what’s wrong. It is difficult, if not impossible, to solve a problem until you have figured out what it is.

--Ron Riggio

Please mail your questions about workplace issues, challenges or problems to Shop Talk, Los Angeles Times, P.O. Box 2008, Costa Mesa, Calif. 92626. Or call (714) 966-7873 and leave a voice mail message. Questions of general interest will be answered in this column on Mondays.