- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Get your taxes done using TurboTax
To clarify, are you claiming actual expenses and claiming a 179 deduction for the car? If so, it seems like there is a problem with the percentage of business use for the car. Also if you sell or trade in the car, all this depreciation needs to be recaptured as a income and could result in a capital gain for you to pay back later, especially if you sell it in the next year or two. Capital gains mean more income taxes you may have to pay.
let me suggest that you use mileage instead of actual expenses. There is a depreciation component built in the mileage rate that needs to be captured but the impact is not as great as claiming the the entire 179 deduction. Besides, if you use actual expenses the first year, you will need to use this the entire period you own the vehicle and use it for business.
The first year may seem like a good return with the 179 deduction but the mileage expense will yield a better deduction over the long run. For this, I suggest that you may consider changing to mileage. This way, you might avoid these nasty error messages.
To change to federal>wages and income>Self-Employment>Self-employment income and expenses. Look under vehicle in your business expenses and select the edit button. Scroll through the sections until it asks you if you would rather take actual expenses or mileage.
**Mark the post that answers your question by clicking on "Mark as Best Answer"