Thank you so much for this information @JamesG1! This makes complete sense to me.
I had one follow up question if you have a chance?
I've had my side business for a few years. For the past few tax returns, when I've claimed a business asset, I've always just took the Section 179 deduction. I didn't realize until now that I was supposed to leave previous years' assets on the following year's tax return.
The business assets I claimed with the Section 179 deduction in 2018, I ended up deleting off my 2019 tax return. And the business assets I claimed with the Section 179 deduction in 2019, I ended up deleting off my 2020 tax return. I didn't do this on purpose; I was unaware I was supposed to leave them on. This was my ignorance. All those business assets I still own and still use 100% for my business. Obviously, going forward, I will leave all the previous years business assets on my future tax returns, now that I know not to delete them.
My question is should I add back the business assets from 2018 and 2019 that I took the 179 deduction on to this year's 2021 tax return? Or just focus on doing this correctly going forward, in which I would leave the 2020 assets on this years' return, and going forward.
Would adding assets from my 2018 and 2019 returns back to my 2021 return raise a flag on my tax return because they have not been on the previous few years' tax returns since I deleted them each year? If I should add them back to my 2021 return, then my 2021 return would have business assets from 2018, 2019, 2020, and the new asset I purchased in 2021.
Oh, also, how long do business assets stay on tax returns if I don't sell them and continue using them 100% for business? Forever? A certain number of years? Or is each type of asset different?
Thank you so much for your help. I frustrated with myself for not realizing I needed to leave previous year's assets on future tax returns, but I am fortunate to know now. Thank you again for your help.
