allocating section 179 deductions

[keplan]

it says: my allowable 179 deduction for all activities is limited to $2,470. My activities total $6,708. You must adjust your 1790 deduction by -$4,238. 

Below if have the mount of $258.00 before limitation 

and underneath there's an empty field to write in an 'amount'.

So, this totally confuses me (never had before) and I have no idea what you' have to adjust' means respectively no idea 'where'?

Could it be that I mad some wrong decisions somewhere earlier or...alas, where?

I'm stuck - help very much appreciated!

[JamesG1 · Accepted solution]

I suspect that you claimed the section 179 deduction for one or more assets acquired in 2021 but the deduction is limited on this year's tax return to the $2,470 because the total cost you can deduct is limited to your taxable income from the active conduct of a trade or business during the year.

There are two issues which might be affecting the section 179 deduction on your tax return.  Both are discussed in this IRS Publication.

Page 3 Line 5

If you are married filing separately, you and your spouse must allocate the dollar limitation for the tax year.

Page 4 Line 11

The total cost you can deduct is limited to your taxable income from the active conduct of a trade or business during the year. You are considered to actively conduct a trade or business only if you meaningfully participate in its management or operations. A mere passive investor is not considered to actively conduct a trade or business.

[keplan]

Thank you so much - your suspicion, that...."I suspect that you claimed the section 179 deduction for one or more assets acquired in 202" was what I unnecessarily did!