Question

Section 179 - Turbo Tax flags Section 179 limit of $25000

Forum|Forum|2 years ago
February 16, 2024
1 reply
0 views

Hi,

I completed my federal and California tax but Turbo Tax keeps flagging that my Section 179 total elected cost exceed $25000 for form 3885A Worksheet line 8 . I believe that's an incorrect flag as I'm way within the federal limit on form 4562 and if it's larger than $25000, form 3885A worksheet line 9 is to take the smaller value between line 5 and line 8 which would be $25000.

Am I incorrect or is there a bug in Turbo Tax 2023?

I'm stuck now because Turbo won't e-file because of the above.

Please help.

Thanks

Daniel

TurboTax Home & Biz Windows

M

Mike9241

the $25K is a state of California limitation - the 3885A is a California form.

For the 2023 tax year (when taxes are filed in 2024), the maximum deduction under Section 179 in California is $25,000. However, this amount is subject to reduction if the total cost of all IRC Section 179 property placed in service during the taxable year exceeds $200,000. Notably, California does not allow the IRC Section 179 expense election for off-the-shelf computer software