Depreciating your car can be complicated and if your job is not long term you will be faced with recapture issues when you stop. Much easier to claim standard mileage. You will be completing Sch C and TurboTax will then put your amounts on the correct lines of the 1040.
I used Turbo Tax for the first time last year. Always had an accountant do my returns. The car I. used for dash used as a trade the first week on jan 2022. The deductions worked out better with actual cost vs. mileage.
I will be using mileage for 2022 return. Now I am trying to estimate my taxes. The question I have is how much will I owe on the depreciated car i traded in . I was hoping someone here could guide me in the right direction or give me a ball park answer as to how much.
Since you used the actual expenses option in 2021 you MUST use the actual expenses on the 2022 return including taking depreciation for the time it was a business use asset.
Thank you for replying. I am trying to get a ball park on what I will owe & how it is calculated.
Is it the trade value I received Jan 7th, 2022. $ 15,500 - $ 8671 depreciation write off 2021 ?
Also the new car put in service Jan 7th 2022. Can I now use actual mileage for this year ?
Thank you for your help.
For the new vehicle you can choose the standard mileage rate OR the actual expenses + depreciation. If you choose the standard in the first year you can "flip flop" between the options in future years. But if you start with the actual expenses option you must use it for every tax year until you sell it.