Section 179

Forum|Forum|4 years ago
August 25, 2021
2 replies
16 views

Hi guys I have my own NEW business but not making any revenue yet because it was established the last year of 2020 and is kind of self-employed. I bought a car weighs over 6,000lbs and it costs me around $45,000. How can i fully take advantage of Section 179 to deduct and how much should i expect for my next year tax refund. Because it will be my first time doing so any comment or explanation will help me a lot.

Anonymous_

Level 15

Section 179 has both a dollar limitation and a taxable income limitation.

See https://www.irs.gov/pub/irs-drop/rp-19-08.pdf

If you have no taxable income from an active trade or business for the taxable year (including earned income as an employee), then you cannot take advantage of the Section 179 deduction.

MirkaAuthor

Level 2

how about an independent contractor (uber, doordash, lyft) I've been doing this since pandemic 2020 and still doing now.

is that count as the business purpose and get deduction i want which is section 179?

is there any particular dollar amount i generate in order to qualify or not?

Anonymous_

Level 15

@Mirka wrote:
is there any particular dollar amount i generate in order to qualify or not?

Your deduction is simply limited to the amount of taxable income from a trade or business, which would include salaries/wages earned as an employee and self-employment income.

Mike9241

Level 15

if you take section 179 that isn't deductible because there is no business income. the amount carries over to the next year and is deductible to the extent of net business income in that year. the issue you face is if there are a lot of years without enough net business income to use up the 179 deduction.

Mike9241

Sharon F

Level 2

I totally understand that there needs to be income on the Sched C .... however, does it only rollover to future years or can it also roll over into W-2 wages?