Yes, it sounds like the tractor will qualify as an asset. An asset is anything you purchase to use in your business to make money, which will last for more than 1 year. I'll include instructions for entering this in the software below.
Depreciation expense allows you to spread the deduction for the cost of the asset over it's 'useful' life according to IRS rules. As a small business owner, you'll typically be able to take the total deduction this year (the year "placed in service" in your business), through Bonus Depreciation & Section 179. However, if you didn't make much money in your business this year, you may want to take the standard expense amount and save your deductions for future years (when you expect to have more income).
If the tractor (or any other assets you have) cost less than $2,500, then you can tell the software this (at the start of the asset addition section) and you'll be able to 'elect' to deduct these expenses in full this year. In this case, you can enter them under whatever business expense applies, such as supplies or the miscellaneous section.
To enter your vehicle expenses in the TurboTax Self-Employed Edition, follow the instructions below.
- Log in and click Take me to my return
- Click Federal Taxes and then Income & Expenses (If you have the blue button 'Check for more income', click it and then click 'Skip to see all income')
- Next scroll down to Self-Employment and click Show more
- Click Start/Revisit next Income & Expenses
- Next, click Edit next your applicable Self-employed business.
- Click Add expenses for this work and on the next screen you'll see a listing of the common business expenses (including those mentioned above).
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Under the first section for common expenses, scroll down to the section for Assets. Select the circle and then click Continue to enter your expenses. The first question will ask you about assets taking the election to expense assets in full that cost less than $2,500.
At step #2, if you do not have a Federal Taxes tab then click the Business tab and then:
- Click Continue and then select I'll choose what I work on
- Click Start/Revisit next to Business Income & Expenses
- Then click Edit next to the applicable Self-employed Business
- Scroll down to the Business Assets section click Update
- Next, you'll be able to enter all of your information for the tractor and take depreciation expense. The first question will ask you about assets costing less than $2,500.
