vehicle section 179 deduction

[PP]

Thank you for the response. This is incredibly frustrating as I have been using TT for a while and would have preferred using TT platform. May I ask if you went with H&R or did you somehow forced the right amount using TT ? How is it that no one from TT has fixed this.

Thanks 

[PP]

Btw here is the snapshot from Turbotax itself... but the software does not follow this. Has anyone figured out a work around ? 

Thanks

TurboTax Tip:

Your maximum depreciation of a new or used qualifying vehicle put into service in 2024 is $20,400. Automobile depreciation limits are $19,800 for the second year; $11,900 for the third year; and $7,160 for each successive year until fully depreciated.

Vehicles

Depreciation and expensing for that car or truck you use for business is a little trickier than for other types of business assets because IRS has special rules for vehicles.

No matter how much you pay, the standard depreciation first-year write-off for a new or used car or truck is $12,400 in 2024. This first-year depreciation is up from $12,200 for qualifying vehicles placed in service in 2023. (These figures assume 100% business use.)

Under the bonus depreciation rules, another $8,000 can be depreciated during the first year. The expensing is no longer limited to new vehicles. Used vehicles are eligible for bonus depreciation beginning in 2018.

In 2024, automobile depreciation limits are $19,800 for the second year; $11,900 for the third year; and $7,160 for each successive year until fully depreciated.

In 2023, automobile depreciation limits are $19,500 for the second tax year; $11,700 for the third tax year; and $6,960 for each successive tax year until the cost is fully depreciated.

[AmeliesUncle]

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@PP  wrote:

Hi Did anyone finally figure this out. I am in the same boat :

My auto is < 6000 lbs and only used for business. I took section 179 in 2023 along with bonus depreciation resulting a depreciation of $20200. However, for 2024, turbotax is only calculating $2297 which is way below what the limits are. What am I missing ? Any help would be greatly appreciated. 

Thanks,

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Have you looked at my comments above?  The program is doing it correctly.

There is a weird rule that basically says the unused 80% depreciation can't be used until year SEVEN.  In the meanwhile, you can only depreciate the other 20% (after reducing the Basis for the Section 179 that you took).

[wujz2004]

That is what I understand after lots of readings. In 2024, only the 20% of expense can be depreciated according 200 DB-HY. The excess amount (80% of expense claimed for bonus depreciated - $20,200) can only be deduced till year 7.  It would be helpful if TurboTax could provide a comprehensive view of the depreciation over the entire recoverable period, rather than just focusing on the deduction for the first year. Unfortunately, TurboTax didn’t do a good job with this. We're stuck, and it’s frustrating! I've used TurboTax for years, and now I’m not sure how much I can trust it going forward.

[AmeliesUncle]

There are countless ways that TurboTax gives incomplete, misleading or outright wrong information.  It is a hazard of using Do-It-Yourself software.

In my opinion, a good tax professional is priceless (disclaimer: I am a tax professional so I am biased).  In my opinion, doing your taxes yourself (including using DIY software like TurboTax) is the best way to pay the MOST amount of money (at least over your lifetime) because you are not well guided for how to do things.

[PP]

Hi there, I don't think that is correct... the automobile depreciation is a 5 year period so the discussion of 7 year doesn't make sense to me.

What's interesting is based on original poster's suggestion, I spent most of today doing this exercise on H&R -- and guess what, their numbers come fine. I am with you on having used Turbo Tax for years ....Its a substantial impact.

[AmeliesUncle]

As I said, the program is correct due the weird rule.  If H&R is giving different results, it is wrong.

It is not as clear as it could be in the Publication, but look at "Deductions in years after the recovery period" in Publication 463.  

https://www.irs.gov/publications/p463#en_US_2024_publink100034033

[PP]

Phew - never new I would be going through these in such detail. I did read the "Deductions in years after the recovery period." That is applicable only if the there is an unrecovered basis in the car at the end of the recovery period (meaning - its expensive enough that the depreciation exceeds the yearly limits) .  Thanks for all the discussion here. ... 

[AmeliesUncle]

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@PP  wrote:

that the depreciation exceeds the yearly limits

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That is exactly the case.  Year one has 80% depreciation.  The unused amount goes to year seven.

The other years only use the 20% for depreciation.