Automobile Section 179 (6,000 lbs+)- Full Deduction Question

[stevenhendrikse]

I am self employed and in sales and would like to deduct the full amount of a new vehicle (over 6,000 lbs) that was put into service the first week of January 2023.

When I add to the automobile expense section of my income, it does not provide me with the 179 full deduction option.

Do I need to add the vehicle as an "asset" even though Turbo Tax says not to do this?

Surprised TurboTax has not made this more clear, I am sure many others are having this issue with expensing their 6000+ lbs vehicles in 2023.

I remmeber when Turbo tax would allow you to add your own tax forms, but I guess no longer. If this was the case I would add form 4562.

[JamesG1]

You may be limited by the taxable income reported for the self-employment activity.  IRS Instructions for Form 4562, here, states:

Page 4 Line 11 

The total cost you can deduct is limited to your taxable income from the active conduct of a trade or business during the year.

Or you may be bumping into the IRS Depreciation Limits discussed in IRS Publication 463 Travel, Gift, and Car Expenses.  See page 24 Limit for sport utility and certain other vehicles here. 

You cannot elect to deduct more than $28,900 of the cost of any heavy sport utility vehicle and certain other vehicles placed in service during the tax years beginning in 2023.

There are limits on the amount that you may deduct for depreciation of your vehicle.  The section 179 deduction and special depreciation allowance are treated as depreciation for purposes of the limits.

[stevenhendrikse]

This is all good information however not the issue that I am looking for a solution to.

TurboTax is not giving me the option to fully deducted the vehicle this year under the section 179 rule.

I am just trying to find out if I add this vehicle as an asset or as a vehicle. Because when I add it as a vehicle just does the standard deduction, and does not allow me to choose to fully deduct it under 179.

I read because my occupation was sales that possibly it did not give me the option because someone who was in farming was given the option. However, self-employed sales can fully deduct as well. I know that this is the rule.

how would I find out how to do this within the software?

thank you

Steve

[PatriciaV · Accepted solution]

If you enter actual expenses for your vehicle, you will be given the opportunity to choose depreciation options, including Section 179. Vehicles are reported in a separate topic from other assets.

The standard mileage deduction has a built-in depreciation factor that may not provide the result you desire. And if you choose the standard deduction in the first year, you won't be able to claim actual expenses in the future.