Bonus Depreciation 168(k)

[wzepeda2023]

How do I select bonus depreciation for my vehicle under IRS Code 168(k) instead of IRC 179? I dont see the option in Turbotax software?

[GeorgeM777]

When you enter depreciable assets--such as a vehicle--TurboTax will generate Form 4562 and apply the correct depreciation method. There is no single place in TurboTax to enter depreciable assets.  Instead, when you enter your business-related expenses, TurboTax will ask about related assets and apply the depreciation at that point.

To find this section in TurboTax online, open your return, then go to My Account >> Tools (left margin) >> Topic Search. Type in "vehicle expenses", then click the topic in the list that applies to your expenses (self-employed, job-related, rental, etc.) Click GO to go directly to the start of this section.

@wzepeda2023

[Mike9241]

look for the line that says special depreciation 

you can not take depreciation if you use the standard mileage method.

[wzepeda2023]

Hello GeorgeM777:

When I work thru my schedule C and answer all the questions regarding my vehicle it calculates depreciation using IRC 179. In fact, I spoke with a Turbotax Live advisor last night and he had very little knowledge about bonus depreciation under IRC 168k and was not able to help. I did see form 4562 on the IRS website but when I search for it in Turbotax it doesn’t take me to the form. Again, I feel like this is a software issue constraint, so if I can’t find proper resolution to take full advantage of using IRC168, I wont be using Turbotax to file my taxes this year. Im hoping someone can help me out. Thanks for your support. 

[wzepeda2023]

Hello Mike9241:

Yes, I am using the actual method which is more beneficial for my situation over the milage method. Having said that, I can not see that option within the Turbotax software/questions. I do see that line when I pull up form 4562 on the IRS website, along with literature regarding bonus depreciation method under IRC168(k) and how it is to be applied. Nonetheless, all references to the depreciation within Turbotax are related to IRC 179 which may indicate software may not be up-to-date (just a guess). Hoping someone can walk me thru the specifics within turbotax. Thanks!

[CeeCee123]

I'm having this same issue. Did anyone ever respond? The only depreciation option offered is standard depreciation 179.

[PatriciaV]

On the page "How much do you want to deduct for the business use of this vehicle?", under the Section 179 deduction box, you should see a note about Special Depreciation. If you check the box for "I'll take the special depreciation allowance," Section 168 will be applied. 

While TurboTax doesn't specifically call this Section 168, it is special bonus depreciation that can be used with or without a Section 179 deduction. Depending on the type of asset you enter, you may receive a 100% or 50% special depreciation allowance. You can confirm the result on the Car & Truck Expenses Worksheet for this vehicle under Part VI (this is a TurboTax worksheet and not an IRS form).

If you don't see this option at first, go back to the mileage entry screen and check the box for "I'll enter my beginning and ending odometer readings..." In some cases, this triggers the special depreciation option. 

Be sure you are choosing to enter actual expenses so TurboTax calculates depreciation. Also confirm that you want to stick with actual expenses (usually highlighted as "recommended") at the end.