Self-employed but no longer use my business/personal car. Depreciation? Do I owe money

Forum|Forum|2 years ago
April 9, 2024
2 replies
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I am self-employed I purchased a new vehicle in 2015 it's used 90% for business 10% for personal. My form 4562 shows zero on section 179 and depreciation allowance and depreciation basis. I pay $23,000 for the car in 2015. Insurance reimbursed me $9,000 in 2023 once it was stolen. I don't know how to do the depreciation report. Will I have to pay money to the IRS since I used it for business. I counted vehicle expenses and standard mileage deduction through the years.

ThomasM125

You will have to visit the business vehicle section in TurboTax and indicate that you stopped using the vehicle in 2023:

Later in that section, you will be asked to enter the sales price of the vehicle, which will be the insurance proceeds times your business use percentage, and the cost of it. Also, you will be asked to enter the depreciation equivalent of the vehicle if you used the milage allowance to determine your vehicle expenses. There will be a Learn More link on that page to inform you of how to determine the depreciation equivalent. It will be the business miles you entered each year multiplied by a cost per mile. One you enter all of that, TurboTax will report any gain or loss you have on the disposition of the vehicle.

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AmeliesUncle

You can't report the 'sale' of a vehicle in the vehicle section if it has varied in business percentage from year to year. You would need to say it was converted to personal use, then MANUALLY calculate things and report things in the "Sale of Business Property" section (or go to a good tax professional).