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jimbob72
Level 2
September 17, 2019
Question

MACRS deprecition car deduction

  • September 17, 2019
  • 1 reply
  • 0 views

File jointly

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

    1 reply

    DoninGA
    Level 15
    DoninGALevel 15
    Level 15
    September 17, 2019

    Depreciation of a vehicle used in business is only entered as an expense for the business.

    J
    jimbob72Author
    Level 2
    September 17, 2019

    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

     

     

     

     

    DoninGA
    Level 15
    DoninGALevel 15
    Level 15
    September 17, 2019

    The business net loss or net profit either decreases or increases your total gross income entered on Form 1040 Line 6.

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