MACRS deprecition car deduction

[jimbob72]

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

[DoninGA]

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

[jimbob72]

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]

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

[Anonymous]

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.       

[jimbob72]

yes that was what i was seeing. thnak you