Section 179

[daisiechain]

Hello

I bought a sewing machine in 2017 for $18,000. I used Section 179 and took $6,000. (I may not be using the correct terminology). Can I use the remaining $12,000 on my taxes this year? I've never entirely understood Section 179 when a percentage or a specific amount is claimed.

Did the $12,000 just go poof and now it's not beneficial at all or how can I use it?

Thanks,
Lisa

[AmeliesUncle]

If you took $6000 out of $18,000 as Section 179, the other $12,000 is depreciated as usual.  So that $12,000 is spread out over several years (probably 7-8 years for a sewing machine).

If you used TurboTax in 2017 and transferred your information to 2018, then 2019, the program should already have that information for that "asset", and the depreciation should automatically be there.  But you may want to double check that the "asset" is still there.

If it is not there (such as if you did not use TurboTax before this), then enter the information as an "asset" to be depreciation.

[VictoriaD75]

As @AmeliesUncle pointed out, the additional $12,000 should have been depreciated over time beginning in the year of purchase, using a tax depreciation system known as MACRS. For 2019, you cannot simply take the additional $12,000 if you did not take the depreciation in 2017 & 2018. Section 179 is available in the year of purchase only. 

Review your 2017 & 2018 returns. Look for Form 4562 and determine if depreciation has been taken on the remaining $12,000. If you are using TurboTax each year, this asset should have carried forward and depreciation taken, as stated above. If not, you may need to amend prior year returns. Be sure not to take too much depreciation in 2019, as you cannot just use the $12,000 as a starting point in the current tax year.