Depreciation

Forum|Forum|3 years ago
March 24, 2023
2 replies
22 views

One of my clients bought a business car in 2021, but the previous tax preparer didn't include it on their tax return. Can I add in 2022 and take 2022 depreciation?

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George4Tacks

Level 15

Depreciation starts when the asset is put into service. Did the prior preparer maybe inadvertently elect to state standard mileage rate? See Pub 510

"However, if you used the standard mileage rate in the year you place the car in service and change to the actual expense method in a later year and before your car is fully depreciated, you must use straight-line depreciation over the estimated remaining useful life of the car. "

Answers are easy. Questions are hard!

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rcooley25

Level 7

Correct me if I am wrong. But once you use the standard mileage rate for a vehicle are you not suppose to continue using the standard mIleage rate for the vehicle. I did not think you could change from year to year.

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Terry53029

Intuit Community Champion

From IRS. Here is link. https://www.irs.gov/taxtopics/tc510

To use the standard mileage rate for a car you own, you must choose to use it in the first year the car is available for use in your business. Then, in later years, you can choose to use the standard mileage rate or actual expenses.

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TaxGuyBill

Level 15

Yes, you can take Actual Expenses for a business vehicle, even if the prior return neglected to include vehicle expenses on the tax return. But as was mentioned, unless the Standard Mileage Rate was used in the first year (timely filed), you can not use the Standard Mileage Rate.

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