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R. Klein, EA
R. Klein, EA, Accountant
Category: Financial Software
Satisfied Customers: 3375
Experience:  A member of the Intuit Ask a Tax Expert team and 10 years as QuickBooks Certified Pro Advisor.
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I am working on 2012 taxes and on form 2106 in the depreciation

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I am working on 2012 taxes and on form 2106 in the depreciation information smart worksheet on line D it wants the allowable carry over where last year 2011 we had 5663.00 but I do not see how to figure the amount for this year ??

R. Klein, EA :

Hello and thanks for your TurboTax question today. I am Randall and I am specialist in helping with this program (although this is NOT a TurboTax website)

R. Klein, EA :

Can you please provide me the following information:

R. Klein, EA :

1. Please tell me the exact error message you received.

R. Klein, EA :

2. Which version of TurboTax are you using (Online, PC< or MAC)

Customer:

I am using windows xp

Customer:

as stated in my question it tells me

Customer:

form 2106 adjustments wks. depr smart wks, line D must be entered

R. Klein, EA :

Which version of TurboTax are you using today? Online (Internet) or Desktop software?

Customer:

installed version

R. Klein, EA :

Thank you.

R. Klein, EA :

Are you using Forms Mode where you can see all the forms? Or just working in Interview mode so far?

Customer:

I have been using both

R. Klein, EA :

And which version of TT are you using today...Deluxe, Premier or Home & Business?

R. Klein, EA :

(Icon is top left corner of your program screen)

Customer:

Home & Business

R. Klein, EA :

Very good.

R. Klein, EA :

Now if you are not already in Forms mode, please click the icon in the top right corner to go to Forms mode

Customer:

ok I am there

R. Klein, EA :

Just below the TUrboTax icon on the top left is Stop Sign icon marked Errors. Can you please click that once.

R. Klein, EA :

It should show an error at the bottom right and take you to the first error

R. Klein, EA :

Did form 2106 Wks come up?

R. Klein, EA :

more specifically the Form 2106 Adjustments Worksheet

Customer:

yes it has but I do not understand what the amount for line D in the depr info smart workbox

Customer:

yes

R. Klein, EA :

So you have a red box on line D of the "Depreciation Information Smart WOrksheet"?

Customer:

yep

R. Klein, EA :

OK. So if you move your mouse over that field you should see a PLUS to the left of the field. Please click that and tell me what happens

Customer:

last year I had 5663.00 from section 179 as a carryover

R. Klein, EA :

Let's see if that makes "tax sense"

Customer:

it opens the worksheet windo

R. Klein, EA :

Did you have a LOSS in your business last year?

Customer:

yes with all of the investments into new equip

R. Klein, EA :

Was your business a Schedule C (Sole proprietor), or did you have a Schedule E with income or loss from a partnership or S-Corp?

Customer:

Schedule C (Sole proprietor) LLC

R. Klein, EA :

Did you (or your spouse) have any income from wages in 2011 or from any other activity where you were an active participant (in other words, another business)?

Customer:

Yes my wife works her normal job and I am on disability

Customer:

she gets w2 each year

R. Klein, EA :

Was your wife's wages more than $5663 last year?

Customer:

no

Customer:

oh yes about 19k

R. Klein, EA :

I see.

R. Klein, EA :

And approximately how much equipment did you deduct in 2011 as Section 179 expense?

Customer:

looks like around 2000.00

R. Klein, EA :

Earlier, you said that the carryover was over $5600

Customer:

that was the carry over amount

Customer:

I am really not as organized as I would be because ofXXXXXcrashes this year

R. Klein, EA :

So it sounds like you make very little profit (if any) not including these Section 179 deductions to begin with.

Customer:

not yet as I stated I am on disability and have been starting an internet business when I used to be a master auto tech

Customer:

many new things to learn'

R. Klein, EA :

OK. So you probably are not using depreciation effectively and one of the rules of Section 179 is that you must have a profit to reduce in order to expense assets (deduct the cost in the first year). SInce your profit for several years is insignificant, taking a Section 179 is not doing you any good. You probably should be using regular depreciation methods.

R. Klein, EA :

If you are not familiar with how depreciation works, I would recommend taking your last few years returns to a tax pro in your area.

R. Klein, EA :

In the meanwhile, we can deal with 2012 now.

Customer:

ok

R. Klein, EA :

So, if you correct the prior years returns so that you have no Section 179 deductions, you would therefore have no need for a carryover. So we are going to delete this item form your return.

R. Klein, EA :

If you are still on that 2106 ADJ WKS, there is a button at the bottom left of the form says DELETE FORM. Go ahead and click it.

Customer:

done

R. Klein, EA :

Does that make the error go away?

Customer:

ok I have done that and rerun error checker and found no errors...

R. Klein, EA :

Great. So we have resolved your 2012 issue?

Customer:

yes sir thanks so very much

R. Klein, EA :

OK, glad I could help.

Customer:

again thanks so very much

R. Klein, EA :

Have a great day!

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