179 from a purchase previous year

[Mike92ct]

Under the assets section of my tax software for my self employment I am entering a $7500 purchase. The software asks WHEN it was purchased. Understandably for assets and depreciation, a previous year makes sense. But even though I enter the year prior to the tax year, It's still suggesting I take a full or partial 179 deduction. Am I missing something that allows that? 

[Mike9241]

what year was it placed in service? that's the year for the 179. of course we can't see what you've done or even know what year you're working on (online is only for 2022)  and of course many aspects of  the 2022 app may not be up to date. some updates may not come through until January. 

[Mike92ct]

Well, to not enter further confusion, let me think of an example..

Lets say a $7,500 purchase was made on 12/25/2021. A business was started on 01/01/2022.

Let's say there was no business or mention of asset on the 2021 taxes (wouldn't be.. business started 2022) 

So in that example, what options are to the then compare the tax advantages. Is 179 available for this item previous year, but placed in service beginning on next year, but only few days later, or is depreciation only available, spread over 5 years. Or combination of the two..

[Rick19744]

Based on your facts:

• Keep in mind you may have a business income limitation if you take Section 179.
• You could also take bonus depreciation
• Best to think longer term when making the decision for bonus, Section 179 or regular depreciation
• I would just enter the asset placed in service date as 1/1/2022 for simplification

[Mike92ct]

I was under the impression the purchase needed to occur in the tax year. But it seems when it's placed in service is the key. Which is 2022.

Now, by income limitation, does that mean, no need to further take deductions that bring me beyond zero, and instead somehow spread over years. 

[Rick19744]

Your questions are now becoming planning questions with too limited facts and these questions are not conducive to a forum such as this.

Make an appointment with a tax professional where you can have a one on one and address any questions face to face.