Auto Depreciation with Bonus

[markorec]

I have a question regarding auto depreciation. I bought a vehicle ($54,500) and put into service 1/1/23. For my 2023 taxes I elected bonus depreciation. I use the vehicle 80% business so I got 80% of $20,200 or $16,160 for 2023 depreciation. $54,500 x80% = $43,600 - $16,160 = $27,440 remaining.

Now starting my 2024 taxes and transferring the info from 2023. Same 80% business use. Turbo Tax says my federal depreciation is $2,790. I do not see how this is calculated but I thought it would be using the 5 yr MACRS $27,440 x .4 = $10,976. What am I doing wrong?

Also, as a test, I changed my 2023 return to not accept bonus depreciation so that I got $54,500 x 80% x .2 (first year for a total of $8,720 depreciation and a remainder of $43,600 - $8,720 = $34,880

When I transfer that info to 2024, then Turbo Tax calculates year 2 as $34,880 x .4 = $13,952 as expected.

Why is year 2 after bonus depreciation in year 1 not calculated the same way? Any ideas?

[MarilynG1]

It sounds like possibly the total mileage and the business mileage entered don't equate to 80% business use for TurboTax to arrive at the $2,790 amount.  Check all your entries in this section.

You depreciation deduction may also be limited by your business income. If this applies, unused depreciation will carry over. 

Depreciation for business vehicles is calculated differently than for other assets. 

This article has more detailed info for Business Vehicle Depreciation that may help you.