Heavy SUV bonus depreciation help

[andyak]

Small Bus.

Bought ford expo 7400lb for 40000 in august 2023

I cannot get any prompt in turbotax to take bonus depreciation - it was there in 2022 version... any ideas?

It seems I can enter vehicle as asset and 179 it but it would be limited to $28900  (per current pub 463 which isn't final - maybe this is why bonus dep is not in turbotax 2023 yet???)   Is it true that bonus depreciation would not be limited like the sec 179 ?

Thanks,

Andy

[ThomasM125]

You need to indicate in TurboTax that you want to take the special bonus depreciation on the screen that says How much do you want to deduct for the business use of this vehicle:

You can deduct up to 80% of the cost of a vehicle using the bonus depreciation allowance in 2023, it is down from the 100% allowance you could claim in 2022. You are correct, bonus depreciation is not limited to net income like section 179 depreciation is.

[andyak]

Thomasm125  wait I remember that Q in the section 179 part.  I will go and see if that solves it.   Thought that used to be in the vehicle bus information walk through in 2022 version. 

[JBalchun]

Hello,

I'm having the same issue.  I have a heavy SUV purchase of $107,788.

I select "I'll take the special depreciation allowance" and that's the end of it.  It let's me leave the full 107k as the section 179 amount.

Then under the federal Smart Check it gives me an error on Line 39 "Enter the amount of section 179 elected"

It says too large, cannot be greater than limits below.  I don't see any "limits below"

What is the correct math?  80% x purchase price or 179 limit of $28,900 + (purchase price - limit) x 80% ?

Thanks,

Justin

[AmyC]

In your case, business miles divided by total miles times purchase price. You are below the limit so you are not affected by the maximum. Form 4562 Instructions lists the business percentage times the price subject to limitations. These are:

You cannot elect to expense more than $28,900 of the cost of any SUVs and certain other vehicles placed in service during the tax year.

For more information, you can see line 26 instructions.

[JBalchun]

Does that include the bonus depreciation?

[AmyC]

No. The bonus is allowed above the sec 179 to the max bonus limit.  Sec 179 and bonus depreciation are separate. Be sure to keep track  of how much of each as you may need to recoup the depreciation.

Items  first placed in service are usually depreciated or you have the option to  take a sec 179. You can take both. but it gets more tricky. The sec 179 limit is applied first. Then any allowable bonus depreciation can be claimed.  Page 5, line 14 for form 4562 states:

For qualified property (defined below) placed in service during the tax year, you may be able to take an additional special depreciation allowance. The special depreciation allowance applies only for the first year the property is placed in service. The allowance is an additional deduction you can take after any section 179 expense deduction and before you figure regular depreciation under MACRS.

For more about sec 179, see Pub 946

For more about bonus depreciation, see Form 4562 instructions

[JBalchun]

Will turbo tax do this for me?

From what I can see, it doesn't do the math for me.  

Thanks!

[DianeW777]

If you would like to send us a “diagnostic” file that has your “numbers” but not your personal information it would help. Let us know what version of TurboTax you are using.

If you would like to do this, here are the instructions: 

TurboTax Online:

Go to the black panel on the left side of your program and select Tax Tools. 

1. Then select Tools below Tax Tools. 
2. A window will pop up which says Tools Center.  
3. On this screen, select Share my file with Agent. 
4. You will see a message explaining what the diagnostic copy is.  Click okay through this screen and then you will get a Token number. 
5. Reply to this thread with your Token number and your state. This will allow us to open a copy of your return without seeing any personal information.  

TurboTax CD/Download:

If you like, you can send a copy of your return that will be scrubbed to eliminate your personal data by using these steps:

1. Click on Online in the top left menu of TurboTax CD/Download for Windows
2. Select 'Send Tax File to Agent'
3. Write down or send an image of your token number and state then place in this issue.
4. We can then review your exact scenario for a solution.
5. Please also tell us any states included in the return. This is necessary for us to view the return.

We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution. 

[JBalchun]

I figured it out. 

When it asks me for my Section 179 Deduction, I needed to enter $28,900.

Because it's a heavy suv, that is the max allowed.  This wasn't provided by turbotax.  I had to google it.  Seems like it would be easy for turbo tax to say, enter a number between 0-28900, if you selected heavy suv.

Anyways, the remainder of the cost is then multiplied by 80% for special depreciation (automatically, behind the scenes), if you elect to take it.  

The remainder is then depreciated normally.