I am trying to take the 179 deduction for a personal vehicle I bought for business use in October on form 4562.

[beachbum420]

I purchased a personal vehicle in October 2022, which I use almost exclusively for business purposes for my LLC business. Am I eligible to take the 179 Deduction on form 4562? And, why does TT ask for miles driven 1/1-6/30 and 7/1-12/31? It won't correctly calculate my business use as 75% because I had to enter "0" miles for the first half of the year.

[RobertB4444]

Whether you are eligible to take the 179 deduction will depend on a number of factors including how much money you spent on assets in total.  

Here's an article on that.  (The 179 part is about halfway down the page)

The mileage rate changed July 1st of last year.  That is why TurboTax has the two different mileage inputs.  And make sure that you tell TurboTax the date that you put the car in service (the first day you drove it for work).  Even if you bought it earlier in the year the date that you put it into service is most important for business use.

@beachbum420 

[beachbum420]

Thank you. We meet all the eligibility requirements based on the information in the article. I, the shareholder in our LLC, had income from the LLC. This is our only equipment purchase for the year, so we don't come close to the maximum threshold. The vehicle is not used for a rental property business - our business is construction.

I do not want to take the entire deduction this year, but I do want the option to take the remaining deduction later. If I don't take it now, then I won't be able to take it later.  Am I having issues with the percentage of usage based on when I purchased the vehicle (Oct. 2022) and TT is calculating my percentage of use as zero for the first half of the year? Based on mileage, I used the vehicle 78% (2762 miles out of a total of 3554 miles) for business, but TT is calculating the use as 30.8%. I took a similar deduction in 2019 for a vehicle purchased in November and didn't have this problem because the mileage rate was the same for the whole year. Do I need to distribute the mileage across the whole year instead of placing it all in the second half of the year?

Thanks again!

[PatriciaV]

You may wish to review your entries for this vehicle, as TurboTax calculated 78% business use when I entered the info you listed above.

Enter the mileage as your records show, which should be zero miles for the first half of the year.

Note that you will have a much larger deduction if you take actual expenses (including depreciation) rather than the standard mileage deduction. The only downside is that you have to report actual expenses every year as long as you use the vehicle for your business. But the large deduction this year may be more beneficial to your tax situation.

You may choose to take Section 179 and/or special depreciation for the year you first used the vehicle in your business. In subsequent years, you will have a deduction for regular depreciation only. Most vehicles are depreciated over a total of five years.

[Mike9241]

@beachbum420  did you answer no to the question about having records of personal mileage for full year?  there is a special allocation in this case. what version of Turbotax are you using? I'm using desktop deluxe and when I enter total miles of 3554 and business mileage 7/1 to 12/31 as 2762 (1/1 to 6/30 left blank)

 and check yes to record of personal mileage i get 77.72 % buisness use.

we can't see your entries so this may be a bug in the version you are using. contact support

[beachbum420]

I think because the usage is 0% for 1/1-6/30, the calculator is somehow calculating it differently. TT shows my usage as 19.43% with the correct mileage entered, "0" miles 1/1-6/30 and "2762" miles during 7/1-12/31. I think it is doing a quarterly average. (78% + 0% + 0% + 0%) divided by 4 quarters equals 19.5%. Is there a work-around?

[beachbum420]

I answered the question Yes to "Did you document any of the work miles you drove for this partnership in 2022?"

I then entered the beginning and ending odometer readings, with zero miles driven 1/1-6/30 and 2762 driven 7/1-12/31.

It doesn't ask about personal mileage. I have tried both standard mileage and actual expenses. Neither change the 19.5%.

Also, to note: I don't use the vehicle for hire and we have 0-4 vehicles. I don't know if that matters....it shouldn't.

I am beginning to think there is a coding problem in this section.

[beachbum420]

I forgot to add that I am using TT online Self-Employed, same one I used for several years now.