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Level 2
posted Apr 19, 2022 6:33:38 AM

Schedule C and car depreciation

On Schedule C, under Expenses:
Car depreciation: this one, EVERY YEAR OF MY LIFE, and I've been self employed forever, confuses me. I've looked back through my last six (2015-20) years of taxes and I see the form 4562 sometimes yes and sometimes no. (I did have a different - new-used - vehicle starting in tax year 2018). Previous vehicle, a 4562 filed: 2015 and '16, yes; 2017, no. Current vehicle acquired 2018 (used): no 4562 in 2018 (2018 was NOT me doing turbotax); 2019, yes, 2020, no.
Why worried: Last year, for 2020 taxes, line 9 has a very low amount, this year it's WAY higher. What did I do?? Did I switch between standard mileage deduction and actual expenses?? Since it's now 2022, I've had the car 4 years, and only one more year to depreciate anyway (yes??) PLUS I have barely driven it for use cos of Covid other than errands for last two years. What is the easiest thing to do? At this point I don't care if I get more or less refund. Just want to finish fed and get to state taxes! Someone please help me, I hope. 😫

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1 Replies
Expert Alumni
Apr 19, 2022 12:52:03 PM

When you enter a car into TurboTax for business (or any tax software) it will ask your business use percentage (often based on mileage but sometimes just based on your word).  

 

It will offer you the option to deduct 50% 0f the value of the car in that initial year - or maybe 100%.  

 

Based on what you've written there is no way to tell what you've done with the depreciation on your return.  I would recommend finding someone who understands depreciation and taxes to look at your returns over the last several years to figure out where you're at on the depreciation of the cars.