Depreciation from previous years

[hung3]

Last year I started a small business - I bought equipment that I listed as assets to depreciate - looks like 5 years, and elected to take a portion of the value as a deduction in 2021.

This left me with a portion of the equipments' value as an asset to depreciate.
However, I'm not sure how to claim the depreciation this year. It should be 1/5th of the value that was given last year, since it was a straight-line depreciation.

[ThomasM125 · Accepted solution]

Once you enter the equipment in TurboTax and list the cost and date put into service, TurboTax will calculate the depreciation for the year entered and the following years automatically. 

If you didn't use TurboTax last year, you need to enter the asset when you enter your business expenses, in the Business Assets section, and then Assets being depreciated. You will be asked to enter the amount of any special or bonus depreciation taken when you first entered the asset, also the cost and date put into service. TurboTax will calculate the depreciation for the current and following years based on what you entered.

[hung3]

So when I tried this year, I don't think it was able to find my return from last year (I guess if you use the downloaded TurboTax program it doesn't work?)

So that means I'll need to manually go in and fill out the depreciation for all my stuff from last year?

[RobertB4444]

If you used the downloaded program from last year then your tax file is stored on the same computer that you used it on.  If you download the software for this year onto that computer it will roll over the tax return from last year.  If you switch to the online version you can still roll over last year's file but only on that computer.  

Here's some more information on rolling over last year's return.

@hung3 

[hung3]

Oh so it has to be on the same computer? If I can find the tax file, can I use that on a new computer?

We did it on a different computer, because unfortunately that one can't use the 2022 version (it's an old computer)

[AnnetteB6]

Yes, if you find your 2021 TurboTax .tax file, you can make a copy of it and move it to the new computer.  Then the 2022 program can find it and import the information to your 2022 return to get started.

@hung3 

[hung3]

Thank you all for your help!

I started doing it manually under Assets and Depreciation or something, until the import using the tax2021 file - I grabbed that and it imported everything and it automatically did the depreciation for me.

[h-bomb]

Hello @ThomasM125: 

I entered an Investment Asset Depreciation last year on TurboTax Premium online and this year, as

TurboTax Premium online reviews my forms, it discovers an issue and states that an item needs to be reviewed and takes me to the Asset Entry Worksheet (for 2024) and states I need to enter the Special Depreciation Allowance Deduction. Note that this is for a computer that I used 15% of the time (i.e., percentage of business use) last year and I still own it.

When I navigate directly to this entry on my state return, this is the message at the top:

Prior Year Depreciation (for my computer)
Because this asset was placed in service in a prior year and a 30% or 50% bonus depreciation allowance was taken, we are unable to calculate the prior California depreciation.

And these fields to enter:

• Prior Year Depreciation
  • Do I enter the deduction reported on the state Depreciation and 2023 Amortization Adjustments form 3885A?
• AMT Prior Year Depreciation
  • Not quite clear on this yet...

 And these are some of the values I have (and most are editable):

-----------------------------------
Original Cost of computer: $3,678

Regular Deprecation Section:
Depreciation Type selected: MACRS
Depreciation and method selected: 200DB
MACRS convention selected: HY
Recovery period period: 5.0
Year of depreciation: 2
Depreciable basis: 552

Alternative Minimum Tax Depreciation Section:
AMT depreciation method: 150DB
AMT recovery period: 5.0
AMT depreciable basis: 552

Eligible Section 179 property?: [Not selected on the worksheet]
-----------------------------------

Please help me understand why TurboTax is not able to calculate this and if known, how do I go about calculating this, if I should adjust any of the pre-selected values on the state worksheet or if I should just leave the Special Depreciation Allowance Deduction blank?

Thanks so much,
H

[ThomasM125]

It is apparent that you didn't use any special depreciation in prior years, so you should either leave that entry blank or enter $0 for it.

[h-bomb]

Thanks so much @ThomasM125 and I appreciate the quick response.