When I load up Turbo Tax 2021 and choose to Start a New Return, I choose to "Transfer Return" from the previous year.
I have a full time job and also have a side business for web design and video/photo services.
In 2020, I entered two cameras I purchased for my business as Business Assets and chose to deduct the full value of the item and took the Section 179 deduction. I bought a new computer in 2021 for my business that cost $2,000 and plan to enter it as a Business Asset on this year's tax return.
When I get to the section on Business Assets for this year's 2021 tax return, on the screen that says, "Now let's review each item you bought", and I click on the radio button "Every item I bought costs $2,500 or less", there is a little message below it that says:
"OK, next we'll review some assets you've previously entered. Once you're done with that, make sure these purchases are entered as other miscellaneous expenses, not assets."
What does this little message mean? It's confusing me.
So, when I go to the "Business Assets Summary" screen, it shows the two cameras I purchased in 2020 that I claimed as the Section 179 deduction last year, with a "Placed in Service" date of 5/20/2020 (which is the date I began using them.)
This screen says, "Select Edit if you either stopped using an asset for your business in 2021, or change the percentage of time you used an asset for business purposes (vs. personal)".
I still used these two cameras in 2021 and the percentage of time used for business purposes did not changed and was still 100%.
I have two questions:
1) I assume I will enter the new computer I bought in 2021 for my side business as a new asset on this screen. Is this correct?
2) What about the two cameras that are already listed on this screen from last year's tax return? Do I just leave them there? Or do I delete them? I assume they were transferred over because I chose to transfer my return from the previous year when I first loaded up Turbo Tax 2021.
The little message on the previous screen said once I'm done reviewing to "make sure these purchases are entered as other miscellaneous expenses, not assets." How is that message related to my situation?
I don't know what I'm supposed to do here. When I add the computer I bought in 2021 as an asset using the Section 179 deduction, it adds that Section 179 value to the total Section 179 value of the two cameras from 2020. Doesn't this mean the two cameras are getting deducted twice (once in 2020 and again in 2021)? And if so, doesn't this mean I should delete the two cameras from 2020 on this year's return because I took the Section 179 deduction for them in 2020?
Or does Turbo Tax know these two cameras were deducted in 2020 based on the "Placed in Service" date on the Business Asset Summary screen, which are from 2020. If so, does this mean Turbo Tax is NOT counting the two cameras towards my Business Assets in 2021, thus the two camera are there ONLY for tracking purposes?
Thank you so much for your help.
