Schedule C - Car and Truck Expenses

[jtupp72]

First a disclaimer: I haven't filed in the last  5 years.

I'm filing my 2024 return and I have some self-employment income. I have a truck that I use for that purpose and I'm claiming deductions related to the truck. I have not claimed any previous deductions related to this vehicle because I have not filed in the last 5 years, so no section 179. The truck was purchased and put into service in 2019.

I'm receiving an error in TT  related to my truck expenses in my review. There are 3 selections it's asking me to enter:

1. AMT Special Depr Allow must be entered.

2. Special Depr Allowance must be entered.

3. Elect 50% must be entered.

I have no idea what I'm supposed to enter here. Since I have no prior year section 179 deductions, can I just enter 0? Should I use the Elect 50% No? Any and all help or insight would be appreciated.

[JamesG1 · Accepted solution]

You may enter $0 for those entries.  

Will you be preparing tax returns for these previous years?

If so, make sure that on these previous years tax return, that you are not reporting special or bonus depreciation on this vehicle.  Also make sure that you report the same cost basis, date of purchase and date placed into service.

You may also be eligible for the standard mileage rate rather than claiming actual costs and depreciation.

[jtupp72]

Yes, I will be filing the previous years, but I plan to hand those off to a professional. From what I understand, I can no longer file electronically anyway.

Doing it this way, am I claiming all of my depreciation now? Will I be able to claim any depreciation in the prior years now? Finally, what should I select for the Elect 50%?

[KrisD15]

When you enter the truck for the first time into the TurboTax program (since you did not file for the last five years)

the TurboTax program will attempt to determine the prior depreciation. 

The program will use the cost you enter and the year it was placed into service. 

It determines what you took but it claims the depreciation for 2024 only. 

Depreciation is taken yearly. 

Your accountant will determine the depreciation for the prior years that you file.

Only if the business use was 50% or greater could section 179 deduction have been taken, and since it was placed into service in 2019, and you did not file, you would select "No", since Section 179 was not taken.

[jtupp72]

Thank you for the helpful responses. The program asks me what my prior depreciation is. I entered zero since I have yet to claim any depreciation on those prior years. Was that not correct?

[PatriciaV]

If you're entering this vehicle for the first time this year, you should accept the prior depreciation that TurboTax calculates for you. The question is not how much depreciation expense you have claimed, but how much depreciation should have already been taken for this asset.

You can return to the vehicle entry topic and review the depreciation questions again. Then accept the value the program offers.