Business & farm
How much of a problem have I caused by filing ’20 & ’21 TT Federal returns w/o entering federal fully depreciated business equipment?
My 2019 and back twenty + years taxes were done by an EA. I have been doing ’20 and forward w/ TT. The State ’20 return is being done manually from downloaded forms.
On 12/31/24, I mailed my paper 2021 & 2022 Federal returns created in TT H & Bus. desktop. I did not take the time to enter the 32-line items of fully FEDERAL depreciated coffee equipment items into those returns. Now as I’m preparing my ’20 & ’21 Calif. State returns I see/ realized from my 2019 CA STATE return that since California does not use some of the accelerated depreciation that the Fed uses, it seems I may have some amounts of ‘put in service in prior years’ depreciation available to expense in 2020 for State. I don’t know about for 2021.
I put no new equipment was put in service in ‘20 or ‘21, so no Fed or State ‘current year’ deprec. (accelerated or otherwise) for these two years.
My questions:
- How much of a problem have I caused by filing ’20 & ’21 TT Federal returns w/o entering federal fully depreciated business equipment?
- Is amending the Federal, especially older than 3 years, say ’20 & ’21 returns to fill in depreciation (history at this point) something that can be done? Should I immediately file an amended return for ’20 & ’21, which would be mailed ≈ 10 days after the originals were mailed on 12/31/24?
- Should I just add the 32 assets w/ their dates, amounts, etc. when I get to my 2022 Federal return in the next day or two and leave ’20 & ’21 as is w/o deprec. info?
- For State Returns, do the attached 3885A’s from ’18 & ’19 give any clue as to what amounts I might use in lines 6, 7, 8a or 8b for 2020 or 2021 3885A’s? (If it helps, my 2019 Deprec. & Amort Report showing all the history, is in my 10/31/23 post above.)
- If yes, would it cause a problem that the State 2020 (and maybe 2021) 3885A(s) would reflect available prior State deprec., when the 2020 & 2021 Federal returns show: a) no Sched C (13) deprec. b) no form 4562 Deprec. & Amort. form filed.
- –OR– Is it better to just forget about whatever State prior year(s) deprec. might have been, so as not to raise a red flag to the State FTB or IRS? While I like the idea of some continuity for the state returns, even if amounts are guesses, I really am not concerned about missing out on a few thousand in CA deprec, deductions… IF that is less likely to cause a red flag, kick back or other problem.
- If I do not amend ’20 & ‘21 Fed Returns, and 2019 remains the last year that has the basis and history information on my bus. assets, when I retire and sell my business, will that cause a problem when a smaller part of a sale price would be for all the used equipment. Most of the price would be from the value of the gross sales/ revenue as well as the profit margins the business generates.
Thank you in advance for any insights. I truly appreciate the help this community has already given me.
Dave
