Heavy equipment loan payments deductible?

[LeeM · Accepted solution]

If it was business equipment for your self-employed business, you would not deduct the payments, it's even better.

You can deduct the entire cost of the equipment if you financed it. You can also deduct the interest you paid.

You can add those pieces of equipment as assets by following the directions below:

Although you need to list these items as assets and depreciate their value you can possibly deduct the entire expense for your 2016 return; instead of over a number of years. This is referred to as a first-year expense or Section 179 deduction. There are a few requirements such as acquired from a non-related party, used more than 50% in your business, purchased not leased, etc. When you list the assets in the TurboTax program it will ask the questions related to utilizing the 179 deduction. The steps to input the asset and claim the 179 deduction are as follows: 

1. Select the Business tab, continue, then I'll choose what I work on.
2. Under he Business Income and Expenses select the update button.
3. Select the edit link listed next to your business name. You will now be on the main page for your Schedule C. 
4. Scroll down to Business Assets and select the start (or update) button. Proceed with questions about the cost of the items and the use of the items. On the describe the asset page, select the appropriate area for the item. You will input one asset at a time. After entering purchase date, cost, percent of time used for business, etc., on the "how do you want to deduct this item" page, select the option for deducting the full value of the item this year; continue. Proceed through the next few steps.
5. Once complete with the first item, on the Business Asset Summary, select the link +add an asset; and go through the steps again for the next item. Once all assets are input select the Done button. It will take you back to the main page for the Schedule C. You can then follow the steps below related to entering your supplies.
   

To view additional information related to the 179 deduction and asset information, please view the following link.

https://ttlc.intuit.com/questions/1901444-turbotax-business-depreciation-section-179-deduction-help-... 

[coachdap]

I purchased 4 different items under one equipment loan.

Do I list each separately and divide the interest proportionally?

Or do I list one item and deduct the monthly payment that includes the interest?