Bought a car for business in December - depreciation question

[Peter1956]

Hi

I bought a 2018 Ford edge in December - use it 89% for business $29654 total cost - added it as a car and entered all milage and everything under job related expense and it is showing the depreciation basis - but giving me any depreciation amount in my taxes. Can anyone explain why? Did I buy too late in the year? Confused.

[MaryK4]

Did you enter it under Business Expenses (I noticed you wrote Job Related expenses in your question).  If you entered it in the correct section, check to see if your standard mileage rate was higher than your actual expenses.  Because you purchased it late in the year, the depreciation may be less than for the second year, but you should still see it.  

Add more to this thread if these suggestions do not work.

[Peter1956]

I am currently a w-2 employee of a company and I use my car 89% of the time, they pay for gas and give me a car allowance - as such I entered it under Job related Expenses. I do file a schedule c for a different business but this year it has less than $100 income so I didn't think of entering it under that. Are you saying I can only depreciate the vehicle if it is under the schedule C Business expenses?

[ThomasM125]

You can't take a deduction for the vehicle on your federal return under current tax laws if you are salaried employed. You use to be able to do this but the new tax law in 2017 did away with that deduction for now. You may get a deduction on your state return, depending on what state you live in.

There are select groups of individuals, such as disabled individuals, certain military members and contract government workers that can still deduct employee expenses on their federal tax return, but for the most part you can't take the deduction in 2021.

[Peter1956]

By "no deduction" I assume you mean depreciation - not the "miles driven" deduction, correct? I drive thousands of non-commute miles per year for the company and get costs re-imbursed.

Next question: so I traded in car number 1 for car number 2 - I got 3000 for the trade from dealer who reduced price of car 2 (no cash traded hands) - do I enter this as a sale of car 1 for 3000 and full list price of car 2? Or do I just reduce the sale price of car 2 by 3000?

[Affordabletaxes2021]

If you are a W2employee there is no deduction for any vehicles for expenses period. That was done away with in 2018 tax  changes.

[Carl]

Basically, with a few exceptions as mentioned above, W-2 job related expenses are no longer allowed. This includes vehicle expenses.

[DMarkM1]

There are no employee business deductions for tax years 2018-2025 unless you fall into one of the qualified categories.  That was part of "Miscellaneous Deductions" which has been suspended with the Tax Cuts and Jobs Act.  Here is IRS Publication 529 for reference.  See the introduction or page 2 for the discontinuance statement.