Wife has w-2 wages
I have 1099 as sole prop. & w-2 wages from direct work
Does new car deduction for sole prop deduct from total reported income (spouse w2, company w2 & 1099 sole Prop.)?
Car used 80% for 1099 work
2019 year bulk of income is from w2's next year 50% from spouse & rest 1099 from my consulting
if new business and 1099 income is less then the new car depreciation limit (18K X.8 usage). 14.400.00
1. can I use the full 1st yr bonus depreciation of 14.4K ?
- That generates a business loss
2. does that loss carry over to combined income (w2 ) and reduces the overall taxable income?
3. or can you only use up to the income number
For ex. (simplified) would it work like:
new business 1009 is 2500.00
car deprecation allowance 14,400 - special 1st yr bonus deprecation based on usage
net results loss(11,900)
w2 wages 80,000 - wife and mine prev. work w2
1040 net income 80k-11.9lk loss or 68.100.00
the schedule C loss (gross income less expenses including depreciation ) will offset the W-2 wages.
but here's the thing. you will have a schedule c loss of $11,900 for 2019 and thus pay no Self-employment tax. However, this loss can not be carried over to 2020 to offset self employment income in that year so if you had no W-2 wages in 2020 and $11,900 in net se income you will pay se tax of about $1,700 in addition to regular income taxes.