Depreciation assumes that assets used to
generate business income will wear out, get used up, or become increasingly
obsolete over a period of time. For taxation purposes, depreciation lets you
deduct the "used up" portion of that asset's cost every year, until
the entire cost is used up or the business no longer owns the asset. You
cannot claim more in depreciation than the value of the item. In this case,
your vehicle.
The prior AMT depreciation would be the same
as the prior regular depreciation if the depreciation was calculated by using
the standard mileage deduction.
It would also be the same if, when you
depreciated the vehicle using the actual costs (fuel, tires, etc). rather than
the standard mileage, you chose a straight line depreciation method.
(This is explained in the screens entitled "Let's Figure Out How to Deduct
Your Vehicle Costs" and "Section 179 Deduction" which includes a
link to on-demand tax guidance about the depreciation deductions you had used
for your vehicle in the past).
If you don't remember, that's ok, use the
defaults presented in TurboTax. If you've had the vehicle longer than 5
years, it would be fully depreciated under both the regular and AMT methods.
To get back to this in TurboTax as an
employee:
1. Open
(continue) your return in TurboTax.
(To do this, sign in to TurboTax and click
the orange Take me to my return button.)
2. In the
search box, search for 2106 and then click the "Jump
to" link in the search results.
3. At
the Tell us about the occupation you have expenses for screen, enter
your occupation.
4.
Click Continue and follow the onscreen instructions.
If you land on the Job-Related Expenses
Summary screen instead, you can either Edit expenses for an
existing job
Try these fixes:
Go back to the sale of vehicle and delete any
numbers in the AMT section.
or
In Smart check, when the worksheet is
displayed, right click on the field (Line 50 and/or Line 51). From the
dropdown menu displayed, select "Override". You should then be
able to enter any number that you want.
Refer to IRS Publication 946, How to
Depreciate Property if you require more detailed, in-depth
information.
To get back to this in TurboTax as
Self-Employed:
·
Under "Business Income and Expenses" select start/update next to
Profit or Loss from Business
·
Click "edit" on the Business Summary
Scroll down to business expenses section, and
click update next to "Business Vehicle Expense"
Again, go back to the sale of vehicle
and delete any numbers in the AMT section.
or
In Smart check, when the worksheet is
displayed, right click on the field (Line 50 and/or Line 51). From the
dropdown menu displayed, select "Override". You should then be
able to enter any number that you want.
Note: If you have an error for Form 8824 line 25:
You have been allowed to deduct depreciation, either as part of the standard
mileage or actual expenses. They want to know what that amount would be if the
vehicle was 100% business use. The easiest way to calculate it is to multiply
the purchase value of the vehicle by 10% for the first year, 20% for any of the
next 4 years you owned the vehicle. If you have owned the vehicle for more than
6 years, your depreciation will be equal to the purchase value of the vehicle.
