Ask Jason – Section 179 and Bonus Depreciation; Educator Expenses; Box 9 of W-2

DISCLAIMER: The answers to questions in this segment are intended to be general in nature and do NOT constitute tax advice. Please contact a tax advisor to discuss your unique situation.

All of the questions below have come from readers over the last couple of weeks:

Q: Do I have to take Section 179 if I take bonus depreciation?

A: No, Section 179 expensing is an optional election. Bonus depreciation and Section 179 expensing are not tied to each other. For a further discussion, see this Dinesen Tax Times article.

Q: Can I take bonus depreciation on office supplies?

A: If you’re talking about things like paper, paper clips, pens, pencils, etc., you would just deduct those items as an office expense. If you’re talking about things like staplers, calculators or anything with a useful life of more than 1 year, you could deduct as a Section 179 expense. (Depending on the total amount spent on staplers, calculators, etc., most tax pros will advise you to just deduct as an office expense rather than Section 179, especially if you only bought one stapler.)

Q: Where do I claim educator expenses on an Iowa tax return?

A: You take it as an “Other Adjustment” on your Iowa tax return. Last year, that was Line 24. As a reminder, you can claim 2010 and 2011 educator expenses on your 2011 Iowa tax return. Click here for more information.

Q: Why is Box 9 on my W-2 grayed out?

A: Box 9 used to show payments under the “advance earned income credit” program. After December 31, 2010, the Advance EIC program was eliminated, which is why Box 9 is now grayed out.

Image: David Castillo Dominici /