topic yes in Business & farm

Hi, how do we take advantage of the section 179 full deduction for a new vehicle used 100% for business? Thanks!

leannepaul — Tue, 04 Jun 2019 19:31:38 GMT

We are self-employed filing married jointly, using Turbotax Home and Business. We purchased a new cargo van over 6000 lbs (Ford Transit 250) in 2017. When we enter the new vehicle in the Business Vehicle Expense section, and choose the Actual Vehicle Expenses method we do not get the option to depreciate the full amount of $31,000. If we enter the vehicle in the Business Assets section, we do see the section 179 option and can deduct the full amount. Should we enter the new vehicle under Business Vehicle Expense, Business Assets, or both? If we have to enter the new vehicle under Business Vehicle Expense only, how can we take advantage of the section 179 deduction? Thank you!

You need to enter it in the Vehicle Expense section only....

CathiM — Tue, 04 Jun 2019 19:31:40 GMT

You need to enter it in the Vehicle Expense section only. Your Section 179 deduction is limited to your business income however. That could be why you are not seeing all of it. I put the step by step instructions here below. Follow them as see if you can get it. If not, you can use the comment section to let me know.

To enter your van into TurboTax and make the Section 179 election, go through the steps below. It will take quite a few screens before you get to the section where you enter the amount of Section 179 deduction you want to take. You will enter your mileage but then elect to use actual expenses (not mileage even though TurboTax may say to take the mileage deduction). See step 13 below. Then you will answer more questions and enter the value of your van. Eventually you will get to the screen where you enter your Section 179 deduction (see step 15 below)

Click on Federal in the bar to your left
Under Income & Expenses tab at the top, click Review next to self employment income and expenses
On the screen Your 2017 self employment work summary, click Edit next to your business (if you have it set up)
Click on Add Expenses for this work
On the screen Tell us about any expenses for business click on Vehicle and Continue at the bottom of page (Vehicle is in the Less Common Expenses near the bottom)
Did you use a car or truck for your business? Yes
On the screen Tell us about your business vehicle, enter your vehicle information
On the next screen, choose Yes I own this vehicle
On the next screen answer questions for Was this vehicle available for personal use in 2017?
On the next screen answer questions for Let's get some info about how you tracked your business and personal miles in 2017
On the next screen answer questions about How do you want to enter your mileage for your Truck? and enter your mileage
On the next screen answer questions How many vehicles did you use for your business?
On the next screen choose "I'll enter my actual expenses…
Continue answering through the screens, enter the purchase price of vehicle etc.
On the screen "How much do you want to deduct for the business use of this vehicle?" you can choose how much Section 179 deduction you want to take

Hi - this all works as expected until we get to step 15....

leannepaul — Tue, 04 Jun 2019 19:31:42 GMT

Hi - this all works as expected until we get to step 15. I do not get the screen that says "How much do you want to deduct for the business use of this vehicle?" After I type in the Purchase Price, I get the screen that says I get a bigger deduction for actual expenses. I click the option to stick with actual expenses. It then goes to the screen for entering additional expenses. I enter the interest paid for my vehicle, then click Continue. Then I get the screen that says "congratulations you've got a total vehicle deduction of $2544". I click Continue, and I'm back to the Vehicle Summary.

Go back and make sure you have over 50% business use. Th...

CathiM — Tue, 04 Jun 2019 19:31:43 GMT

Go back and make sure you have over 50% business use. This means that the vehicle business miles has to be more than 50% of the total miles. Something in your questions has eliminated the 179 option. Make sure you answered you own to vehicle also. Try that and let me know.

That's what we suspected, but we can't figure out what ha...

leannepaul — Tue, 04 Jun 2019 19:31:45 GMT

That's what we suspected, but we can't figure out what has eliminated it. The total miles number is the same as the business miles. And we did answer that we own the vehicle. We have the old vehicle, which was traded in for the new vehicle, still on the return since we used it for part of the year. For that vehicle the answers are the same (we own it, total miles same as business miles). Could Turbotax be "confused" due to the 2 vehicles?

Did you enter the new vehicle as a trade in (like kind ex...

CathiM — Tue, 04 Jun 2019 19:31:46 GMT

Did you enter the new vehicle as a trade in (like kind exchange)?

yes

leannepaul — Tue, 04 Jun 2019 19:31:47 GMT

yes

To be clear - the old vehicle is designated as the trade-...

leannepaul — Tue, 04 Jun 2019 19:31:49 GMT

To be clear - the old vehicle is designated as the trade-in, not the new one.

If you buy Section 179 qualifying property with cash and...

CathiM — Tue, 04 Jun 2019 19:31:51 GMT

If you buy Section 179 qualifying property with cash and a trade-in, its cost for purposes of the section 179 deduction includes only the cash you paid. That is why you aren't receiving it. Here is a link to IRS publication 946 <a rel="nofollow" target="_blank" href="https://www.irs.gov/publications/p946#en_US_2017_publink1000107411">https://www.irs.gov/publications/p946#en_US_2017_publink1000107411</a>

The article makes sense. In our case, the trade in value...

leannepaul — Tue, 04 Jun 2019 19:31:52 GMT

The article makes sense. In our case, the trade in value of the old van was $3500. We paid $31,000 cash. So I think we should be able to deduct the $27,500.

Our purchase date/trade in date for the vans was 8/1/17....

leannepaul — Tue, 04 Jun 2019 19:31:54 GMT

Our purchase date/trade in date for the vans was 8/1/17. On the forms, I can see that the new van is designated as 48% business and the old van is designated as 61% (doesn't make sense, both should be 100%). So we decided to change the date to 1/1/17 and see what happens. Now we get the Special Depreciation allowance screen - but it doesn't ask us how much, just if we want to take it. We click Yes and Continue, and go through the last couple of screens. I checked the forms, and now the new van is designated as 100% and the old van is 8%. It's allowing us to take a 50% deduction ($15K). I don't think Turbotax is calculating this correctly. We have read multiple websites that say we can take the full deduction, and the percentage of business use changing with different dates doesn't make sense.

I think the problem is the trade in. You may have to ente...

CathiM — Tue, 04 Jun 2019 19:31:55 GMT

I think the problem is the trade in. You may have to enter the disposal and purchase as separate instead of a trade in. You would have to enter the disposal of the old as the trade in value and enter a new purchase of vehicle for the new vehicle. You will have to go back and redo but that should get it to work.

We finally got back to this and had to do two things to g...

leannepaul — Tue, 04 Jun 2019 19:31:56 GMT

We finally got back to this and had to do two things to get the Section 179 deduction to work correctly:
1. Change our answer to "Did you track your personal miles?" to "Yes". This corrected the percentage of business use to 100%. We answered "No" previously because this vehicle is only driven for business - no personal at all.
2. Remove the trade-in on the new vehicle. We entered the amount of the trade-in as the disposal, so that got added to income.
Thanks for your help!

Oh good to hear you got it to work! Thank you for that in...

CathiM — Tue, 04 Jun 2019 19:31:58 GMT

Oh good to hear you got it to work! Thank you for that information!

I have similar problem, I think I should be able to deduc...

gregggggg — Tue, 04 Jun 2019 19:31:59 GMT

I have similar problem, I think I should be able to deduct the full $30,000 I paid for business truck (I use 80% for business) but turbo tax keeps offering me a portion like $9,248.

Re: Oh good to hear you got it to work! Thank you for that in...

gainesvilleguy — Sun, 22 Mar 2020 20:09:30 GMT

Cathi, your instructions were very helpful, but I'm still not getting the full deduction, either (I'm doing 2019 taxes). I did not have a trade-in so that's not the problem, but TT did ask when I purchased the vehicle and it seems to be reducing the deduction by the proportion of the year prior to purchase (nearly cutting the deduction in half). I think this is wrong and I should be able to deduct 100% of the purchase price even if I bought on the last day of the year. Let me add that I did have another car in business use until I bought the replacement car, so perhaps that is affecting the deduction. Also, the replacement car was used (but I put in the actual purchase price). Can you help?

Re: Oh good to hear you got it to work! Thank you for that in...

AmeliesUncle — Sun, 22 Mar 2020 23:59:45 GMT

@gainesvilleguy

Is your vehicle over 6000 pounds?

Why are you choosing Section 179 rather than using the Special Depreciation Allowance ("Bonus Depreciation")? That can cause problems.

Re: Oh good to hear you got it to work! Thank you for that in...

wpearrie — Sat, 04 Jul 2020 16:23:24 GMT

Something does not seem correct. I had the same problems last year with getting the full deduction for my vehicle. I am ready this thread and hope to be able to go back and check and correct it all. I have used TT for 25 years, but now I am thinking I need a CPA.

I'm having problems with this too

alexander6 — Tue, 02 Feb 2021 04:13:41 GMT

Our solution was similar. By switching over to "Forms", and navigating to the Car and Truck Worksheet for the vehicle we were trying to get Sect 179 deduction for, we found that the only way to make it work was to check "Yes" for "Have record of personal mileage for full year?" at Line 10a within Part I - Vehicle Information. Also, we noticed that if this was checked as "No", the software would change the "Percent of business use" to 50 percent, even though we used the vehicle 100 percent for farm use. The software seems glitchy with respect to this, and I'd like to suggest Intuit review. Everything I've read suggests that if we use the vehicle 100 percent for business use, we are entitled to the Sect 179 deduction. Why would TurboTax make it so hard for a user to claim it? This software is all about getting the biggest deductions, right?

Re: I'm having problems with this too

DianeW777 — Tue, 02 Feb 2021 17:30:39 GMT

The Section 179 can be used for your vehicle if all the entries are entered. Keep in mind that if your business miles are less than your personal miles TurboTax automatically determines the business use percentage per IRS guidelines.

Sign into your TurboTax account > Select Income and Expenses > Business Income > Select the Farm activity where the vehicle is used.
Select the appropriate response to whether it was used for personal use and if you had another vehicle for personal use
Select yes for tracked miles for business and/or personal miles
Enter the total miles driven for the farm and total miles (for 100% use they must equal)
Continue and select Yes to use actual miles, then continue to answer the questions on each screen
Enter the date you became the owner of this vehicle (if not 2020, Section 179 is not allowed)
Continue to enter the cost of the vehicle
The next screen will ask how much you want to expense using Section 179
See the images below for assistance.

Review the images below which appear in both TurboTax Desktop and TurboTax Online.