vehicle depreciation issue over the years

[firedrake123]

We have been using personal vehicle for business.  This year I realized,  the depreciation is not entered correctly in the system or maybe i am missing something. How do i fix it. I don't think the car is 100% depreciated and the 6 year depreciation is not done yet

• Turbotax Had added depreciation for 2022,2023, 2024

• No depreciation in 2021, and 2025

I am guessing i may have put standard deduction in 2021 (not sure as i can't find that info) and changed to actual in 2022 but i don't see anything this year

Some more data:

purchase price - 45540
2023 - basis calculated by system - 8,671 - deprciation 1779

2024 - basis calculated by system - 6,622- deprciation 1346

2022 - basis calculated by system - 15183 - deprciation 1954

2025 - form 4562 has car in there but no values.

[ThomasM125]

The variations in basis and depreciation each year are affected by what you enter for personal and business mileage driven each year. The more business miles versus personal, the larger the depreciable basis and resultant depreciation.

I suggest you edit your business entries and on the screen that says Your (name of business) Business, choose Business Expenses, then Business Vehicle Expense menu options. Then, choose the option to update your business vehicle entry. You will come to a screen that asks you how you want to enter your vehicle mileage. You need to enter your total mileage, the mileage driven for business and your commuting miles. Your depreciation deduction will be dependent on how many miles you drove for business versus personal.

[firedrake123]

yes thats what i have done. 
In fact in one screen it says 

Your vehicle expense deduction so far is $2,712.

But then even though the business use is approximately 37% i only see 125 deduction and no depreciation

[DianeW777]

If you would like to send us a “diagnostic” file that has your “numbers” but not your personal information it would help.  If you would like to do this, here are the instructions:  (Don't forget to give us the state)

TurboTax Online:

Open your return -Go to the menu panel on the left side of your return and select Tax Tools. 

1. Then select Tools below Tax Tools.
2. A window will pop up which says Tools Center.  
3. On this screen, select Share my file with Agent.
4. You will see a message explaining what the diagnostic copy is.  Click okay through this screen and then you will get a Token number.
5. Reply to this thread with your Token number and your state. This will allow us to open a copy of your return without seeing any personal information.

TurboTax Desktop:

If you like, you can send a copy of your return that will be scrubbed to eliminate your personal data by using these steps:

1. Click on Online in the top left menu of TurboTax Desktop for Windows
2. Select 'Send Tax File to Agent'* > Follow the prompts to reach the token number.
   • Enter your email used for TurboTax > Enter your code > Send
3. Write down or send an image of your token number and state then place in this issue.
4. We can then review your exact scenario for a solution.
5. Please also tell us any states included in the return. This is necessary for us to view the return.
   • *If using a MAC, go to the menu at the top of the screen, select Help, then, 'Send Tax File to Agent')

We will be able to see exactly what you are seeing and we can determine what exactly is going on in your return to provide you with a resolution.

@firedrake123 

[firedrake123]

thanks @DianeW777  - token number is 1339853, state WA

[DianeW777]

Please provide your state for us so that we can review for you. 

@firedrake123 

[firedrake123]

I did

State is WA (washington)

[DianeW777]

Based on business miles divided by total miles the depreciation will change each year. The business cost basis changes each year and the business use percentage changes each year. 

This means the depreciation allowed each year is based on the straight line half year convention using the the lower rates or ADS (alternative depreciation system) when the business use is 50% or less. Here is what should have been the rate each year if the business use was lower than 51%

• 2022 Year 1 - NA due to standard mileage rate possibly?
• 2023 Year 2- 20% x business cost basis
• 2024 Year 3 -20% x business cost basis
• 2025 Year 4 -20% x business cost basis
• 2026 Year 5 -20% x business cost basis
• 2027 Year 6 -10% x business cost basis
  • Table 8A - IRS Publication 946

The miles are key to determining the depreciation each year. Based on what I can see it was purchased in 2022, not 2021. It appears the vehicle is used in both business and rental activity which does create more difficulty for the software. Currently and at the point of sale or trade due to calculating the appropriate deduction in each separate activity it's more challenging when actual expenses are used instead of  the standard mileage rate (SMR). 

Be sure to check out both the sections to review all the detail about each vehicle.  If you don't have TurboTax Desktop, it may be a good idea to switch but it appears you are using that to view the worksheets. 

I am reviewing the Depreciation and Amortization Report for 2025 under Schedule E and there is a separate one under Schedule C which is what you may be looking at because that one does not have all the data.

Please review the information provided and then update with your additional questions and we will help.

@firedrake123