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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15600
Experience:  15years with H & R Block. Divisional leader, Instructor
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How do I figure out depreciation income tax return?

Customer Question

How do I figure out depreciation for my income tax return?
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.


Depreciation can be complicated. You have to deal with 5 items when calculating (Basis,Class,Recovery Period, Method).

If you are using a program then you will just have to enter the information about when purchased and how much it cost for the program to automatically apply the depreciation schedule to the item.

If you are doing your return using paper forms you can always use a depreciation calculator.

I will give you a link to a calculator

Customer: replied 1 year ago.
THat's not my question. My question is about line 9 on Schedule C. I bought a car in cash for business on 12/31/2015, should I put my Section 179 deduction here for $11,160?
Expert:  Robin D. replied 1 year ago.

You first must enter your depreciation on Form 4562.

You then carry your depreciation form the 4562 to the Schedule C line 12.

So yes you will see that amount on the C line 12 after all your depreciation form the 4562 is calculated.

Customer: replied 1 year ago.
What's going to Line 9?
Expert:  Robin D. replied 1 year ago.

That line of the Schedule C is for the actual costs of operating the vehicle or the standard mileage rate. But if you are using depreciation you cannot claim standard so that is for your gas, repairs, oil.

Customer: replied 1 year ago.
What does line 3 on Form 4562 mean ? -- "Threshold cost of section 179 property before reduction in limitation"
Expert:  Robin D. replied 1 year ago.

That is the maximum you are allowed. That is the $500,000 you have read about.

Businesses exceeding a total of $2 million of purchases in qualifying equipment will have the Section 179 deduction phase-out dollar-for-dollar and completely eliminated above $2.5 million. Additionally, the Section 179 cap will be indexed to inflation in $10,000 increments in future years.

Customer: replied 1 year ago.
if I only use my new car for business, driving 3 miles on 12/31/2015, I can put $11,160 on Line 12, right?
Expert:  Robin D. replied 1 year ago.

If that is your total depreciation from form 4562, you can.

The amount you can elect to deduct is not affected if you place qualifying property in service in a short tax year or if you place qualifying property in service for only a part of a 12-month tax year.

Customer: replied 1 year ago.
On Schedule C, Line 23, can my new car's tax and fee go here?
Expert:  Robin D. replied 1 year ago.

No those are under operating expenses. Actual expenses on line 9.

Customer: replied 1 year ago.
thanks, ***** ***** need an accountant to do it for me.
Expert:  Robin D. replied 1 year ago.

Sometimes that is best in the first year especially if you are attempting to do this on paper.

You are most welcome.
My goal is to give you excellent service.
Your positive rating is thanks enough.