Vehicle depreciation and 179 deductions on SK-1

[beachbum420]

I have entered the vehicle depreciation for my new vehicle (placed into service in 2022) on my SK-1 income but I can't figure out how to take the 179 deduction on that vehicle. It qualifies for the $26,200 deduction for SUV over 6000 pounds.

[RobertB4444]

When you enter a vehicle into TurboTax business the very first question after "How Much Did You Pay?" is the special depreciation allowance.  Delete the vehicle and re-enter it and pay special attention to the type of asset and the date placed in service.  Then the special depreciation should pop right up.

@beachbum420 

[beachbum420]

This is not in my business return. This is my personal income tax return. I am using TT online Self Employed. I have entered my SK-1 income, along with my vehicle expenses and reimbursements. But, none of the interview questions gear toward the 179 deduction.

[KrisD15]

For your type vehicle, $26,200 is the limit for Tax Year 2022. 

Section 179 cannot be used to increase that amount.

According to the IRS:

“Situations affecting dollar limit.

Under certain circumstances, the general dollar limits on the section 179 deduction may be reduced or increased or there may be additional dollar limits. The general dollar limit is affected by any of the following situations.

• The cost of your section 179 property placed in service exceeds $2,620,000.
• You placed in service a sport utility or certain other vehicles.
• You are married filing a joint or separate return.”

“You cannot elect to expense more than $26,200 of the cost of any heavy sport utility vehicle (SUV) and certain other vehicles placed in service in tax years beginning in 2021. This rule applies to any 4-wheeled vehicle primarily designed or used to carry passengers over public streets, roads, or highways that is rated at more than 6,000 pounds gross vehicle weight and not more than 14,000 pounds gross vehicle weight.”

@beachbum420 

[beachbum420]

I understand the parameters for taking the deduction. I just simply can't figure out how to add to my return via the Interview questions in TT online. The Interview screens never take me to a place where I can add the 179 deduction in the SK-1 Income section. Under the vehicle section, I have added the vehicle with the normal depreciation information (expenses versus mileage rate, etc.), but once I enter all that information, it never takes me to a screen to take the 179 deduction.

[AliciaP1]

You can only take the Section 179 deduction on assets used in a trade or business.  On your personal return, this would mean you would be reporting business activities on Schedule C and would enter the information there (which is where the vehicle section is).  If the business you are receiving the Schedule K-1 from took the Section 179 deduction you will enter the information in either box 11 or box 12 (depending on the Form the Schedule K-1 is for).  

@beachbum420

[beachbum420]

Under the TT Online Self Employed interview, we do not report business expenses under "self employed" income as our income comes from our multiple member LLC. Instead, we report it under "SK-1" income. So, we don't file a Schedule C for our business. We file a Schedule SK-1, along with a Schedule E and form 4562.  The Interview screens for SK-1 income/expenses doesn't give me an option to take the 179 deduction on the vehicle I entered.

[beachbum420]

I will add that the business did not take the 179 deduction on the vehicle because the vehicle is titled to my name personally, not the business.

[AliciaP1]

You are not eligible to take the Section 179 deduction on a personal asset.

See Section 179 for more detailed information.

@beachbum420

[beachbum420]

This is a vehicle we use in connection with our LLC business. It is not just a personal vehicle. We use it for both. We didn't title in the business' name because we use it for personal travel in addition to business travel. 

[AliciaP1]

You cannot take the Section 179 deduction since it is not a 100% business vehicle and if it was, the only entity entitled to take the deduction would be your multi-member LLC.

The LLC can, however, reimburse you for business usage of your personal car with an accountable plan.  The best measurement for that would be for you to submit periodic mileage reports and for the business to reimburse you at the standard IRS mileage rate.

See Accountable Plans for more information.

@beachbum420