I have a 2nd job as a musician. I didn't buy any equipment in 2016, but I have old equipment that I didn't depricate in 2015. Can I do it for 2016?

[IsabellaG · Accepted solution]

You may be able to depreciate it. When did you first buy this equipment? It's considered to be "placed in service" in the year that you  started using it in your business, so if you didn't depreciate any of it in the past, you'll need to amend your prior year tax returns to take the deductions for the previous years. Most equipment is depreciated over 7 years.

Let's say you bought a guitar in 2015, but you didn't claim depreciation last year. In TurboTax Self-Employed, you'll enter this in the Business Expense section under Business Assets. Continue with the questions and on the screen Describe this Asset, choose Tools, Machinery, Equipment, Furniture. See the screenshot. On the screen Tell Us a Little More, check General Purpose Tools, Machinery and Equipment. Next, enter the description date of purchase and the amount.

You'll be asked if you took a section 179 deduction or special depreciation deduction, and you'll answer no. You'll be asked if you used a half-year or mid-quarter convention in the year you first placed it in service. Read the information on the screen, but you'll probably use the half-year convention.

You'll see the screen Confirm Your Prior Depreciation which will show you what you should have taken in the past based on what you entered. Continue, and you'll see the depreciation for the year.