I purchased a new vehicle in January 2020, I only started using it as a Dasher in late May 2021, in the section about the vehicle deductions, it specifically asks "Did you trade in another vehicle to purchase your Mitsubishi Eclipse Cross?"
1) Given the year the vehicle was purchased vs. the year I started dashing, would I still need to include this in my 2021 taxes?
2) Would I also need to report the total sales price, the Cash price before any down payment or trade in value is calculated into the total amount remaining, or would I use the amount on line 5 (shown on the Motor vehicle retail installment sales contract) which states "Amount financed" (which includes other charges + down payment + any applicable taxes) ?
1.) Yes, you should include all of your vehicle expenses incurred for business in 2021. If you don't enter it, you will forego your vehicle expense deduction that helps offset your Dasher income. TurboTax will ask you for the date you purchased it (Jan '20) and they will also ask for the date (May '21) you started using it in business (placed in service date).
2.) Your purchase price is the sales price before down payment/trade-in, plus taxes and fees to purchase. This amount will be used to calculate depreciation. Loan fees and the down payment are factored into the amount financed - this amount is not deductible, but you will be given the opportunity to deduct the interest portion of the payments after you enter your mileage data for 2021.
To further seek clarification on the sub-question in that field that states: "Total cash and/or loan amount paid with the trade-in"
Would that be the Cash price with the sales tax as listed on the itemization of amount financed page of the sales contract agreement paperwork? (Basically the first amount listed at the very top of this second page; It also lists the sales tax and window etching fee)
Thanks again for the assist!
Yes. You should enter the total amount paid for the vehicle less the trade-in vehicle value in this box. This is the value (basis) of the vehicle. You should include the sales tax paid on the purchase as well as any add-on amenities you paid for.
@Bluejester007