I'm self-employed and bought a new car in Feb 2024. Unfortunately, TurboTax only seems to want to give me the standard mileage deduction for it? It asks me about taking the section 179 and bonus deduction, but after completing those pages the tax I owe stays the exact same on the screen. I'm not taking a loss this year by the way, and so far actually have to pay about $5000 more than I already paid in estimated taxes, so I don't see why I wouldn't be eligible to take another deduction. To try to rule out a bug, I deleted all my car's info and re-entered it. Unfortunately, the federal tax I owe only decreases by about $1500 when the car is added again versus when it's not.
For simple math, the purchase price was $30,000 and I traded in the fully-depreciated car I'd been using for 23 years. The dealership took off $1000 for that, so I ended up paying $29,000 cash. After entering the new car's mileage for business and personal use, TurboTax calculated that I used the car 65% for business and can therefore take up to around $13000 for the section 179 deduction. I've tried entering that amount and several random amounts that are less than that but the taxes the program says I owe stays the same regardless. After the section 179 question it asks if I want to take a special deduction in addition and that this amount is included in the max of $13000. I've tried saying yes as well as no to this question, but nothing changes with the tax I owe either way. When I get to the end of the vehicle section it finally just says I'm best off taking the standard mileage rate (around $5900), and that ends up being my total deduction for the new car, at least as far as I can tell anywhere on my taxes. Interestingly, the old car, which I only used for for about 6 weeks in 2024 but barely drove before I bought the new car since it was on it's last legs, is helping me out with a $1800 deduction! Not complaining, but something doesn't add up. Am I wrong to assume this section 179 deduction would work like any other and actually reduce my tax burden?
Strangely, in clicking through the vehicle section a few times, but not changing anything, the tax I owe has randomly gone down different amounts between $1000 and $4000.
