The De Minimis Safe Harbor is an annual tax election that business owners and real estate investors can make when they file their returns. The election allows you to automatically expense any item under $2,500 on your invoice. If you have an applicable financial statement (AFS), you may use this safe harbor to deduct amounts paid for tangible property up to $5,000 per invoice or item (as substantiated by invoice).
How can I claim the De Minimis Safe Harbor Election for Schedule C expenses?
To elect the de minimis safe harbor for the tax year, you must paper file your return on time (Including extensions) and attach a statement to your return. The statement must be titled “Section 1.263(a)-1(f) de minimis safe harbor election” and must include your name, address, taxpayer identification number (SSN/TIN), and a statement that you are making the de minimis safe harbor election under section 1.263(a)-1(f). If a consolidated group takes the election on a consolidated tax return, it is made for each member of the group. In the case of an S corporation or a partnership, the election is made by the S corporation or the partnership and not by the shareholders or partners.
How do I paper file my return?
To paper file, you mail in your return instead of filing it electronically. To print your return, select Summary/Print from the navigation bar within your account. Once your Tax Return Summary loads, select Print to access your return's PDF. Print your PDF to receive a hard copy of your return.
For the IRS mailing address based on the state in which you live, please click here. If you are also filing a state return, the state mailing address is printed on the state returns.
Your de minimis safe harbor election statement must include the primary taxpayer's:
- Taxpayer Identification Number or Social Security Number (TIN/SSN)
- Statement that you are making the de minimis safe harbor election under section 1.263(a)-1(f)
- Your statement's title must read: "Section 1.263(a)-1(f) de minimis safe harbor election"