"In order to claim Section 179 Depreciation on a new vehicle, you must choose Actual Expenses and not the Standard Mileage"
How do I go about doing that if not in the asset section?
I have a sole proprietor business. I purchased a new 2020 SUV that I use about 70% of the time for my business in Sept of 2019. I'm getting conflicting answers as to whether I enter this simply under "vehicle business expense" or if it would be entered as a "business asset". Which is correct? If either, which would benefit me?
Yes, you first enter it as an asset.
You may have options to use the Section 179 deduction and/or Bonus Depreciation for the cost of the vehicle depending on the amount of business use.
NEXT, you choose to take the Standard Mileage (a deduction based on the miles you drove) OR Actual Expenses (gas and oil receipts).
IF you choose Actual Expenses the first year, you must use that every year going forward.
IF you choose Standard Mileage the first year, you can change the method to Actual Expenses in a future year.
So it is a purchase the first year AND an expense to operate year after year.
You should enter the vehicle used for business under the Vehicle Expense section of TurboTax.
When you get to the screen that asks "What Kind of Expenses Did You Have for (Your Business)"
Choose "Vehicle" (see screenshot below)
This section will handle your percentage of business use, mileage used, etc.
I have seen several places talking of taking a section 179 deduction like this on TurboTax Money Talk:
"In order to claim Section 179 Depreciation on a new vehicle, you must choose Actual Expenses and not the Standard Mileage"
How do I go about doing that if not in the asset section?
After you enter your vehicle expenses, you will be asked if want to deduct the actual expenses for your vehicle or if you want to take the standard mileage allowance deduction. You simply choose which method you want to use.
I'm somehow not getting the question I am asking answered. I am asking WHERE. I can enter it under "Business Expenses - Vehicle Expenses" or can I enter this under "Business Assets - Assets Being Depreciated" ?
Is there any reason why I can not list a new business SUV under "Assets"?
If the vehicle is a business vehicle, you should enter it under Business Assets.
Thank you DavidD66. 1 last question. Do I also enter it under the "Business Expenses - Vehicle Expenses" for the cost of operating and maintaining it? I don't want to do both without being 100% sure that is appropriate.
Yes, you first enter it as an asset.
You may have options to use the Section 179 deduction and/or Bonus Depreciation for the cost of the vehicle depending on the amount of business use.
NEXT, you choose to take the Standard Mileage (a deduction based on the miles you drove) OR Actual Expenses (gas and oil receipts).
IF you choose Actual Expenses the first year, you must use that every year going forward.
IF you choose Standard Mileage the first year, you can change the method to Actual Expenses in a future year.
So it is a purchase the first year AND an expense to operate year after year.