How to enter a new vehicle purchase

[Spires34]

It seems like a common question but I cannot find anyone else asking it and receiving any answers: where do I input the cost/expense of a new vehicle purchase for my LLC in turbotax home & business? a second question to that below, since cost will be split over two separate years:

- I put a down payment on this new vehicle in 2021 of $28k. The vehicle, its a work truck, total is $130k (I will pay remainder in full in 2022). How do I input the 28k DP in 2021 without turbotax thinking that's the full cost of the truck?

[DavidD66]

To enter a vehicle for your business in TurboTax Home & Business, first set up your business.  Once you have created your business, click on "Business Expenses" and select "Business Vehicle Expense".  TurboTax will guide you through setting up your business vehicle.  

As for how your report the expense and in what year, you will set up the truck as an asset that costs $130,000.  You 

 either Start or Update.  If you haven't already, answer the annual election questions, and then select "Add an Asset" from your Business Asset Summary.  You expense the truck by depreciating it (it doesn't matter how or when you paid for it).  You will have some options how to depreciate your truck electing bonus depreciation, and/or Section 179 expense.   For more information on depreciation expense, see the TurboTax Help article:  Depreciation of Business Assets and IRS Publication 946 How to Depreciate Property.

[Spires34]

Thanks for the reply, David. One part that wasn't answered; I put down a DP in 2021 and won't have the truck until April 2022. TT is not allowing me to put in a date under "when did you start using this vehicle for work" since I haven't received yet and it won't be in 2021. So, should I just wait until 2022 tax year to setup this vehicle? 

Also, just to learn and practice the process, I put in info to let me skip through the vehicle setup. it said I can depreciate using the special bonus depreciation and it was around $108k. This will have my expenses at much more than my income. Lets say I made $30k in 2021; wouldn't I want to not deduct 108k as it would be wasted? Does it carry over; and if so how? Should I type in only enough to "zero out" that $30k?

[ZoltanB45]

You would enter the entire cost of the truck and base it on payment made. When you make payments throughout the year, it is not an expense. The interest portion is an expense but you would have capitalized the entire Truck purchase at once. Had you already received the car, you would have just entered the $130000. 

You have an LLC or sole prop so there is no balance sheet. If there were, you would be a loan payable account that would offset the remaining amount you owed.

[pcwill]

So you don't include the downpayment amount?

[BrittanyS]

No, you will enter the vehicle as an asset and list the full value you will pay for the vehicle as the value.  Per DavidD66 instructions, "If you haven't already, answer the annual election questions, and then select "Add an Asset" from your Business Asset Summary.  You expense the truck by depreciating it (it doesn't matter how or when you paid for it).  You will have some options how to depreciate your truck electing bonus depreciation, and/or Section 179 expense."

For more information on depreciation expense, see the TurboTax Help article:  Depreciation of Business Assets and IRS Publication 946 How to Depreciate Property.

@pcwill