Hello, if I buy a new business car and take the 179 deduction on it, can I still use the mileage deduction for the car I already used for most of the year? Can I do both?
Thanks
You'll need to sign in or create an account to connect with an expert.
Each vehicle has it's own choice ... so the old one can continue to use the standard deduction.
Now for the new vehicle ... you have a choice to make in the year you place it in service ... to take either the standard deduction OR the actual expenses which includes depreciation /179 deduction. HOWEVER ... if you choose the actual expenses option you are stuck with that option as long as you use the car for business. If you start with the standard deduction you can flip flop between the 2 options at will every tax year. Think about it carefully to decide which is the better option for your situation.
Ok thanks
Also is there a limit on the deduction based on income? I'm projecting to net about 65000 for the year.. my husband travels all over the east coast for our business and can really use a good truck...if the truck is 30000 and I do the section 179, is that too much to take off my net income?
The Section 179 deduction is limited to $1 million, while bonus depreciation has no annual limit.
Bonus depreciation has a higher dollar limit of $18,000 for cars and passenger trucks purchased during the year. The Section 179 deduction for cars and trucks is limited to $10,000.
Where on my previous year's taxes do I find which I used?
Included in your last year's tax return is a worksheet that shows which car you used for business purposes.
If you are just taking mileage as a deduction you do not have to use the same car, if you are taking actual expenses the car would be listed on your depreciation worksheet that is included in your return.
Link to more information about Business Use of Vehicles
Prior depreciation equivalent and AMT Prior depreciation equivalent is what I am really stuck on. Maybe my question was wrong. Could you explain this to me and where to find it.
Depreciation is calculated for Regular and Alternative Minimum Tax. For the depreciation on a car used in a business the amounts would be different.
You should have as part of your tax return Depreciation Schedules. One Depreciation Schedule is for regular depreciation and another on for Alternative Minimum Tax Depreciation.
Once you find those schedules in your return it shows the amount of depreciation for both calculations.
@rbdrywall10
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
abby8price
New Member
karlahettinger
Level 1
rogerdio
New Member
Irasaco
Level 2
tiediefrenchfry
New Member
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.