What if i bought my car and then became self employed 3 years later. I use this car for business and personal. How do I determine depreciation?

[JulieH1 · Accepted solution]

When you first enter a car into service for your business, you will add the fair market value (FMV) of the car on the day you started using it in your business.  You can either use Kelly Blue Book to get the FMV, your statement on what you owed then or something similar.

Many small business owners use their car for personal as well as business, so you need to establish a percentage of the time you use the car for each.  Once you determine what percentage you use the car for business, you can multiply your standard mileage deduction or actual expenses and depreciation times that percentage to separate the business and personal usage.

It sounds very complicated, but TurboTax will help you.

This TurboTax Overview of Business Use of Vehicles is very helpful:

https://turbotax.intuit.com/tax-tips/small-business-taxes/business-use-of-vehicles/L6hi0zzzh