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When switching from standard mileage to actual expenses in TurboTax, you must use straight-line depreciation over the remaining useful life of your vehicle. TurboTax defaults to MACRS (accelerated) depreciation, but you can choose the straight-line method to spread your asset's cost evenly over its useful life. This provides the same deduction year after year.
However, once you elect the straight-line method for an asset, you cannot switch to MACRS for that same asset later.
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The only two options were half-year or quarter year.
doesn't matter, I ended up just going back to standard deduction.
You can switch from standard mileage to actual expenses, but you must use straight-line depreciation over the remaining useful life of the car.
When switching, you cannot use accelerated depreciation (MACRS) in the first year of the switch; you must use straight-line depreciation.
When TurboTax asks for the convention, it is figuring how many months of depreciation you can claim for the year the asset was placed in service
The Half-Year Convention applies if the vehicle was placed in service at any time other than the last quarter of the tax year.
The Mid-Quarter Convention applies if if more than 40% of the total cost of all business property acquired during the year is placed in service during the last 3 months of the tax year.
If the vehicle was placed in service during the year, and this was your first time listing it in the actual expense section, TurboTax forces a choice. If you purchased it in the last 3 months, you must use the Mid-Quarter Convention.
If you switched to actual expenses, you are required to use that method for the rest of the car's life. And when you sell your vehicle later, you may have to pay depreciation recapture taxes on the depreciation you claimed.
If you are looking for simpler and consistent deductions, staying with the Standard Mileage Rate is often better.
Please return to Community if you have any additional information or questions and we would be happy to help.
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