Filing Your Taxes Online is Fast, Easy and Secure.
Start now and receive your tax refund in as little as 7 days.

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

Find tax credits for everything from school tuition to buying a hybri

3. E-File for FREE

E-file free with direct deposit to get your refund in as few as 7 days.

Filing your taxes with paper mail can be difficult and it could take weeks for your refund to arrive. IRS e-file is easy, fast and secure. There is no paperwork going to the IRS so tax refunds can be processed in as little as 7 days with direct deposit. As you prepare your taxes online, you can see your tax refund in real time.

FREE audit support and representation from an enrolled agent – NEW and only from H&R Block

Tax Extension Online

10ezIncome Tax Deductions 20122010 1040ez FormsComplete 2005 Taxes OnlineHow To File State Taxes Free Online2010 Tax Forms 1040aIrs Amended Tax ReturnTax Act 2008File 1040x Turbotax1040easyHow Do You Ammend A Tax Return1040a Tax FormTurbotax Free Edition10401040ez BookletAmendment TaxesFile My State Taxes Online FreeTax Tips For 2012Hr Block 2010 DownloadHow To Prepare An Amended Tax ReturnHow To File An Amended Tax Return For 20121040 ComCan I Do My State Taxes Online For FreeH&r Block FreeE File 2012 TaxesEz File 1040Form 1040 EzTax Software 2005 2006Free State And Federal E File1040nr TurbotaxH&r BlockHow To Do A Tax AmendmentIrs 2012 1040 Tax FormsFederal Tax Forms 20101040ez 2011 Tax FormTurbotax Military Discount1040x 20101040ez Form Online1040nr 20132012 1040 Ez Form

Tax Extension Online

Tax extension online 4. Tax extension online   Transportation Table of Contents Parking fees. Tax extension online Advertising display on car. Tax extension online Car pools. Tax extension online Hauling tools or instruments. Tax extension online Union members' trips from a union hall. Tax extension online Car ExpensesStandard Mileage Rate Actual Car Expenses Leasing a Car Disposition of a Car This chapter discusses expenses you can deduct for business transportation when you are not traveling away from home as defined in chapter 1. Tax extension online These expenses include the cost of transportation by air, rail, bus, taxi, etc. Tax extension online , and the cost of driving and maintaining your car. Tax extension online Transportation expenses include the ordinary and necessary costs of all of the following. Tax extension online Getting from one workplace to another in the course of your business or profession when you are traveling within the city or general area that is your tax home. Tax extension online Tax home is defined in chapter 1. Tax extension online Visiting clients or customers. Tax extension online Going to a business meeting away from your regular workplace. Tax extension online Getting from your home to a temporary workplace when you have one or more regular places of work. Tax extension online These temporary workplaces can be either within the area of your tax home or outside that area. Tax extension online Transportation expenses do not include expenses you have while traveling away from home overnight. Tax extension online Those expenses are travel expenses discussed in chapter 1 . Tax extension online However, if you use your car while traveling away from home overnight, use the rules in this chapter to figure your car expense deduction. Tax extension online See Car Expenses , later. Tax extension online Daily transportation expenses you incur while traveling from home to one or more regular places of business are generally nondeductible commuting expenses. Tax extension online However, there may be exceptions to this general rule. Tax extension online You can deduct daily transportation expenses incurred going between your residence and a temporary work station outside the metropolitan area where you live. Tax extension online Also, daily transportation expenses can be deducted if: (1) you have one or more regular work locations away from your residence or (2) your residence is your principal place of business and you incur expenses going between the residence and another work location in the same trade or business, regardless of whether the work is temporary or permanent and regardless of the distance. Tax extension online Illustration of transportation expenses. Tax extension online    Figure B , earlier, illustrates the rules that apply for deducting transportation expenses when you have a regular or main job away from your home. Tax extension online You may want to refer to it when deciding whether you can deduct your transportation expenses. Tax extension online Temporary work location. Tax extension online   If you have one or more regular work locations away from your home and you commute to a temporary work location in the same trade or business, you can deduct the expenses of the daily round-trip transportation between your home and the temporary location, regardless of distance. Tax extension online   If your employment at a work location is realistically expected to last (and does in fact last) for 1 year or less, the employment is temporary unless there are facts and circumstances that would indicate otherwise. Tax extension online   If your employment at a work location is realistically expected to last for more than 1 year or if there is no realistic expectation that the employment will last for 1 year or less, the employment is not temporary, regardless of whether it actually lasts for more than 1 year. Tax extension online   If employment at a work location initially is realistically expected to last for 1 year or less, but at some later date the employment is realistically expected to last more than 1 year, that employment will be treated as temporary (unless there are facts and circumstances that would indicate otherwise) until your expectation changes. Tax extension online It will not be treated as temporary after the date you determine it will last more than 1 year. Tax extension online   If the temporary work location is beyond the general area of your regular place of work and you stay overnight, you are traveling away from home. Tax extension online You may have deductible travel expenses as discussed in chapter 1 . Tax extension online No regular place of work. Tax extension online   If you have no regular place of work but ordinarily work in the metropolitan area where you live, you can deduct daily transportation costs between home and a temporary work site outside that metropolitan area. Tax extension online   Generally, a metropolitan area includes the area within the city limits and the suburbs that are considered part of that metropolitan area. Tax extension online   You cannot deduct daily transportation costs between your home and temporary work sites within your metropolitan area. Tax extension online These are nondeductible commuting expenses. Tax extension online Two places of work. Tax extension online   If you work at two places in one day, whether or not for the same employer, you can deduct the expense of getting from one workplace to the other. Tax extension online However, if for some personal reason you do not go directly from one location to the other, you cannot deduct more than the amount it would have cost you to go directly from the first location to the second. Tax extension online   Transportation expenses you have in going between home and a part-time job on a day off from your main job are commuting expenses. Tax extension online You cannot deduct them. Tax extension online Armed Forces reservists. Tax extension online   A meeting of an Armed Forces reserve unit is a second place of business if the meeting is held on a day on which you work at your regular job. Tax extension online You can deduct the expense of getting from one workplace to the other as just discussed under Two places of work . Tax extension online   You usually cannot deduct the expense if the reserve meeting is held on a day on which you do not work at your regular job. Tax extension online In this case, your transportation generally is a nondeductible commuting expense. Tax extension online However, you can deduct your transportation expenses if the location of the meeting is temporary and you have one or more regular places of work. Tax extension online   If you ordinarily work in a particular metropolitan area but not at any specific location and the reserve meeting is held at a temporary location outside that metropolitan area, you can deduct your transportation expenses. Tax extension online   If you travel away from home overnight to attend a guard or reserve meeting, you can deduct your travel expenses. Tax extension online These expenses are discussed in chapter 1 . Tax extension online   If you travel more than 100 miles away from home in connection with your performance of services as a member of the reserves, you may be able to deduct some of your reserve-related travel costs as an adjustment to gross income rather than as an itemized deduction. Tax extension online For more information, see Armed Forces Reservists Traveling More Than 100 Miles From Home under Special Rules, in chapter 6. Tax extension online Commuting expenses. Tax extension online   You cannot deduct the costs of taking a bus, trolley, subway, or taxi, or of driving a car between your home and your main or regular place of work. Tax extension online These costs are personal commuting expenses. Tax extension online You cannot deduct commuting expenses no matter how far your home is from your regular place of work. Tax extension online You cannot deduct commuting expenses even if you work during the commuting trip. Tax extension online Example. Tax extension online You sometimes use your cell phone to make business calls while commuting to and from work. Tax extension online Sometimes business associates ride with you to and from work, and you have a business discussion in the car. Tax extension online These activities do not change the trip from personal to business. Tax extension online You cannot deduct your commuting expenses. Tax extension online Parking fees. Tax extension online    Fees you pay to park your car at your place of business are nondeductible commuting expenses. Tax extension online You can, however, deduct business-related parking fees when visiting a customer or client. Tax extension online Advertising display on car. Tax extension online   Putting display material that advertises your business on your car does not change the use of your car from personal use to business use. Tax extension online If you use this car for commuting or other personal uses, you still cannot deduct your expenses for those uses. Tax extension online Car pools. Tax extension online   You cannot deduct the cost of using your car in a nonprofit car pool. Tax extension online Do not include payments you receive from the passengers in your income. Tax extension online These payments are considered reimbursements of your expenses. Tax extension online However, if you operate a car pool for a profit, you must include payments from passengers in your income. Tax extension online You can then deduct your car expenses (using the rules in this publication). Tax extension online Hauling tools or instruments. Tax extension online   Hauling tools or instruments in your car while commuting to and from work does not make your car expenses deductible. Tax extension online However, you can deduct any additional costs you have for hauling tools or instruments (such as for renting a trailer you tow with your car). Tax extension online Union members' trips from a union hall. Tax extension online   If you get your work assignments at a union hall and then go to your place of work, the costs of getting from the union hall to your place of work are nondeductible commuting expenses. Tax extension online Although you need the union to get your work assignments, you are employed where you work, not where the union hall is located. Tax extension online Office in the home. Tax extension online   If you have an office in your home that qualifies as a principal place of business, you can deduct your daily transportation costs between your home and another work location in the same trade or business. Tax extension online (See Publication 587, Business Use of Your Home, for information on determining if your home office qualifies as a principal place of business. Tax extension online ) Examples of deductible transportation. Tax extension online   The following examples show when you can deduct transportation expenses based on the location of your work and your home. Tax extension online Example 1. Tax extension online You regularly work in an office in the city where you live. Tax extension online Your employer sends you to a 1-week training session at a different office in the same city. Tax extension online You travel directly from your home to the training location and return each day. Tax extension online You can deduct the cost of your daily round-trip transportation between your home and the training location. Tax extension online Example 2. Tax extension online Your principal place of business is in your home. Tax extension online You can deduct the cost of round-trip transportation between your qualifying home office and your client's or customer's place of business. Tax extension online Example 3. Tax extension online You have no regular office, and you do not have an office in your home. Tax extension online In this case, the location of your first business contact inside the metropolitan area is considered your office. Tax extension online Transportation expenses between your home and this first contact are nondeductible commuting expenses. Tax extension online Transportation expenses between your last business contact and your home are also nondeductible commuting expenses. Tax extension online While you cannot deduct the costs of these trips, you can deduct the costs of going from one client or customer to another. Tax extension online Car Expenses If you use your car for business purposes, you ordinarily can deduct car expenses. Tax extension online You generally can use one of the two following methods to figure your deductible expenses. Tax extension online Standard mileage rate. Tax extension online Actual car expenses. Tax extension online If you use actual expenses to figure your deduction for a car you lease, there are rules that affect the amount of your lease payments you can deduct. Tax extension online See Leasing a Car , later. Tax extension online In this publication, “car” includes a van, pickup, or panel truck. Tax extension online For the definition of “car” for depreciation purposes, see Car defined under Actual Car Expenses, later. Tax extension online Rural mail carriers. Tax extension online   If you are a rural mail carrier, you may be able to treat the qualified reimbursement you received as your allowable expense. Tax extension online Because the qualified reimbursement is treated as paid under an accountable plan, your employer should not include the reimbursement in your income. Tax extension online   If your vehicle expenses are more than the amount of your reimbursement, you can deduct the unreimbursed expenses as an itemized deduction on Schedule A (Form 1040). Tax extension online You must complete Form 2106 and attach it to your Form 1040, U. Tax extension online S. Tax extension online Individual Income Tax Return. Tax extension online   A “qualified reimbursement” is the reimbursement you receive that meets both of the following conditions. Tax extension online It is given as an equipment maintenance allowance (EMA) to employees of the U. Tax extension online S. Tax extension online Postal Service. Tax extension online It is at the rate contained in the 1991 collective bargaining agreement. Tax extension online Any later agreement cannot increase the qualified reimbursement amount by more than the rate of inflation. Tax extension online See your employer for information on your reimbursement. Tax extension online    If you are a rural mail carrier and received a qualified reimbursement, you cannot use the standard mileage rate. Tax extension online Standard Mileage Rate You may be able to use the standard mileage rate to figure the deductible costs of operating your car for business purposes. Tax extension online For 2013, the standard mileage rate for the cost of operating your car for business use is 56½ cents per mile. Tax extension online If you use the standard mileage rate for a year, you cannot deduct your actual car expenses for that year. Tax extension online You cannot deduct depreciation, lease payments, maintenance and repairs, gasoline (including gasoline taxes), oil, insurance, or vehicle registration fees. Tax extension online See Choosing the standard mileage rate and Standard mileage rate not allowed, later. Tax extension online You generally can use the standard mileage rate whether or not you are reimbursed and whether or not any reimbursement is more or less than the amount figured using the standard mileage rate. Tax extension online See chapter 6 for more information on reimbursements . Tax extension online Choosing the standard mileage rate. Tax extension online   If you want 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. Tax extension online Then, in later years, you can choose to use either the standard mileage rate or actual expenses. Tax extension online   If you want to use the standard mileage rate for a car you lease, you must use it for the entire lease period. Tax extension online For leases that began on or before December 31, 1997, the standard mileage rate must be used for the entire portion of the lease period (including renewals) that is after 1997. Tax extension online   You must make the choice to use the standard mileage rate by the due date (including extensions) of your return. Tax extension online You cannot revoke the choice. Tax extension online However, in later years, you can switch from the standard mileage rate to the actual expenses method. Tax extension online If you change to the actual expenses method in a later year, but before your car is fully depreciated, you have to estimate the remaining useful life of the car and use straight line depreciation. Tax extension online Example. Tax extension online Larry is an employee who occasionally uses his own car for business purposes. Tax extension online He purchased the car in 2011, but he did not claim any unreimbursed employee expenses on his 2011 tax return. Tax extension online Because Larry did not use the standard mileage rate the first year the car was available for business use, he cannot use the standard mileage rate in 2013 to claim unreimbursed employee business expenses. Tax extension online   For more information about depreciation included in the standard mileage rate, see Exception under Methods of depreciation, later. Tax extension online Standard mileage rate not allowed. Tax extension online   You cannot use the standard mileage rate if you: Use five or more cars at the same time (such as in fleet operations), Claimed a depreciation deduction for the car using any method other than straight line, for example, MACRS (as discussed later under Depreciation Deduction), Claimed a section 179 deduction (discussed later) on the car, Claimed the special depreciation allowance on the car, Claimed actual car expenses after 1997 for a car you leased, or Are a rural mail carrier who received a qualified reimbursement. Tax extension online (See Rural mail carriers , earlier. Tax extension online ) Note. Tax extension online You can elect to use the standard mileage rate if you used a car for hire (such as a taxi) unless the standard mileage rate is otherwise not allowed, as discussed above. Tax extension online Five or more cars. Tax extension online   If you own or lease five or more cars that are used for business at the same time, you cannot use the standard mileage rate for the business use of any car. Tax extension online However, you may be able to deduct your actual expenses for operating each of the cars in your business. Tax extension online See Actual Car Expenses , later, for information on how to figure your deduction. Tax extension online   You are not using five or more cars for business at the same time if you alternate using (use at different times) the cars for business. Tax extension online   The following examples illustrate the rules for when you can and cannot use the standard mileage rate for five or more cars. Tax extension online Example 1. Tax extension online Marcia, a salesperson, owns three cars and two vans that she alternates using for calling on her customers. Tax extension online She can use the standard mileage rate for the business mileage of the three cars and the two vans because she does not use them at the same time. Tax extension online Example 2. Tax extension online Tony and his employees use his four pickup trucks in his landscaping business. Tax extension online During the year, he traded in two of his old trucks for two newer ones. Tax extension online Tony can use the standard mileage rate for the business mileage of all six of the trucks he owned during the year. Tax extension online Example 3. Tax extension online Chris owns a repair shop and an insurance business. Tax extension online He and his employees use his two pickup trucks and van for the repair shop. Tax extension online Chris alternates using his two cars for the insurance business. Tax extension online No one else uses the cars for business purposes. Tax extension online Chris can use the standard mileage rate for the business use of the pickup trucks, van, and the cars because he never has more than four vehicles used for business at the same time. Tax extension online Example 4. Tax extension online Maureen owns a car and four vans that are used in her housecleaning business. Tax extension online Her employees use the vans, and she uses the car to travel to various customers. Tax extension online Maureen cannot use the standard mileage rate for the car or the vans. Tax extension online This is because all five vehicles are used in Maureen's business at the same time. Tax extension online She must use actual expenses for all vehicles. Tax extension online Interest. Tax extension online   If you are an employee, you cannot deduct any interest paid on a car loan. Tax extension online This applies even if you use the car 100% for business as an employee. Tax extension online   However, if you are self-employed and use your car in your business, you can deduct that part of the interest expense that represents your business use of the car. Tax extension online For example, if you use your car 60% for business, you can deduct 60% of the interest on Schedule C (Form 1040). Tax extension online You cannot deduct the part of the interest expense that represents your personal use of the car. Tax extension online    If you use a home equity loan to purchase your car, you may be able to deduct the interest. Tax extension online See Publication 936, Home Mortgage Interest Deduction, for more information. Tax extension online Personal property taxes. Tax extension online   If you itemize your deductions on Schedule A (Form 1040), you can deduct on line 7 state and local personal property taxes on motor vehicles. Tax extension online You can take this deduction even if you use the standard mileage rate or if you do not use the car for business. Tax extension online   If you are self-employed and use your car in your business, you can deduct the business part of state and local personal property taxes on motor vehicles on Schedule C (Form 1040), Schedule C-EZ (Form 1040), or Schedule F (Form 1040). Tax extension online If you itemize your deductions, you can include the remainder of your state and local personal property taxes on the car on Schedule A (Form 1040). Tax extension online Parking fees and tolls. Tax extension online   In addition to using the standard mileage rate, you can deduct any business-related parking fees and tolls. Tax extension online (Parking fees you pay to park your car at your place of work are nondeductible commuting expenses. Tax extension online ) Sale, trade-in, or other disposition. Tax extension online   If you sell, trade in, or otherwise dispose of your car, you may have a gain or loss on the transaction or an adjustment to the basis of your new car. Tax extension online See Disposition of a Car , later. Tax extension online Actual Car Expenses If you do not use the standard mileage rate, you may be able to deduct your actual car expenses. Tax extension online If you qualify to use both methods, you may want to figure your deduction both ways to see which gives you a larger deduction. Tax extension online Actual car expenses include: Depreciation Licenses Lease  payments Registration  fees Gas Insurance Repairs Oil Garage rent Tires Tolls Parking fees   If you have fully depreciated a car that you still use in your business, you can continue to claim your other actual car expenses. Tax extension online Continue to keep records, as explained later in chapter 5 . Tax extension online Business and personal use. Tax extension online   If you use your car for both business and personal purposes, you must divide your expenses between business and personal use. Tax extension online You can divide your expense based on the miles driven for each purpose. Tax extension online Example. Tax extension online You are a sales representative for a clothing firm and drive your car 20,000 miles during the year: 12,000 miles for business and 8,000 miles for personal use. Tax extension online You can claim only 60% (12,000 ÷ 20,000) of the cost of operating your car as a business expense. Tax extension online Employer-provided vehicle. Tax extension online   If you use a vehicle provided by your employer for business purposes, you can deduct your actual unreimbursed car expenses. Tax extension online You cannot use the standard mileage rate. Tax extension online See Vehicle Provided by Your Employer in chapter 6. Tax extension online Interest on car loans. Tax extension online   If you are an employee, you cannot deduct any interest paid on a car loan. Tax extension online This interest is treated as personal interest and is not deductible. Tax extension online If you are self-employed and use your car in that business, see Interest , earlier, under Standard Mileage Rate. Tax extension online Taxes paid on your car. Tax extension online   If you are an employee, you can deduct personal property taxes paid on your car if you itemize deductions. Tax extension online Enter the amount paid on line 7 of Schedule A (Form 1040). Tax extension online Sales taxes. Tax extension online   Generally, sales taxes on your car are part of your car's basis and are recovered through depreciation, discussed later. Tax extension online Fines and collateral. Tax extension online   You cannot deduct fines you pay or collateral you forfeit for traffic violations. Tax extension online Casualty and theft losses. Tax extension online   If your car is damaged, destroyed, or stolen, you may be able to deduct part of the loss not covered by insurance. Tax extension online See Publication 547, Casualties, Disasters, and Thefts, for information on deducting a loss on your car. Tax extension online Depreciation and section 179 deductions. Tax extension online   Generally, the cost of a car, plus sales tax and improvements, is a capital expense. Tax extension online Because the benefits last longer than 1 year, you generally cannot deduct a capital expense. Tax extension online However, you can recover this cost through the section 179 deduction (the deduction allowed by section 179 of the Internal Revenue Code), special depreciation allowance, and depreciation deductions. Tax extension online Depreciation allows you to recover the cost over more than 1 year by deducting part of it each year. Tax extension online The section 179 deduction , special depreciation allowance , and depreciation deductions are discussed later. Tax extension online   Generally, there are limits on these deductions. Tax extension online Special rules apply if you use your car 50% or less in your work or business. Tax extension online   You can claim a section 179 deduction and use a depreciation method other than straight line only if you do not use the standard mileage rate to figure your business-related car expenses in the year you first place a car in service. Tax extension online   If, in the year you first place a car in service, you claim either a section 179 deduction or use a depreciation method other than straight line for its estimated useful life, you cannot use the standard mileage rate on that car in any future year. Tax extension online Car defined. Tax extension online   For depreciation purposes, a car is any four-wheeled vehicle (including a truck or van) made primarily for use on public streets, roads, and highways. Tax extension online Its unloaded gross vehicle weight must not be more than 6,000 pounds. Tax extension online A car includes any part, component, or other item physically attached to it or usually included in the purchase price. Tax extension online   A car does not include: An ambulance, hearse, or combination ambulance-hearse used directly in a business, A vehicle used directly in the business of transporting persons or property for pay or hire, or A truck or van that is a qualified nonpersonal use vehicle. Tax extension online Qualified nonpersonal use vehicles. Tax extension online   These are vehicles that by their nature are not likely to be used more than a minimal amount for personal purposes. Tax extension online They include trucks and vans that have been specially modified so that they are not likely to be used more than a minimal amount for personal purposes, such as by installation of permanent shelving and painting the vehicle to display advertising or the company's name. Tax extension online Delivery trucks with seating only for the driver, or only for the driver plus a folding jump seat, are qualified nonpersonal use vehicles. Tax extension online More information. Tax extension online   See Depreciation Deduction , later, for more information on how to depreciate your vehicle. Tax extension online Section 179 Deduction The section 179 deduction allows you to treat a portion or all of the cost of a car as a current expense. Tax extension online If you choose to deduct all or part of the cost as a current expense, you must reduce your depreciable basis in the car by the amount of the section 179 deduction. Tax extension online There is a limit on the total section 179 deduction, special depreciation allowance, and depreciation deduction for cars, trucks, and vans that may reduce or eliminate any benefit from claiming the section 179 deduction. Tax extension online See Depreciation Limits, later. Tax extension online You can claim the section 179 deduction only in the year you place the car in service. Tax extension online For this purpose, a car is placed in service when it is ready and available for a specifically assigned use, whether in a trade or business, a tax-exempt activity, a personal activity, or for the production of income. Tax extension online Even if you are not using the property, it is in service when it is ready and available for its specifically assigned use. Tax extension online A car first used for personal purposes cannot qualify for the deduction in a later year when its use changes to business. Tax extension online Example. Tax extension online In 2012, you bought a new car and used it for personal purposes. Tax extension online In 2013, you began to use it for business. Tax extension online Changing its use to business use does not qualify the cost of your car for a section 179 deduction in 2013. Tax extension online However, you can claim a depreciation deduction for the business use of the car starting in 2013. Tax extension online See Depreciation Deduction , later. Tax extension online More than 50% business use requirement. Tax extension online   You must use the property more than 50% for business to claim any section 179 deduction. Tax extension online If you used the property more than 50% for business, multiply the cost of the property by the percentage of business use. Tax extension online The result is the cost of the property that can qualify for the section 179 deduction. Tax extension online Example. Tax extension online Peter purchased a car in April 2013 for $24,500 and used it 60% for business. Tax extension online Based on his business usage, the total cost of Peter's car that qualifies for the section 179 deduction is $14,700 ($24,500 cost × 60% business use). Tax extension online But see Limit on total section 179, special depreciation allowance, and depreciation deduction , discussed later. Tax extension online Limits. Tax extension online   There are limits on: The amount of the section 179 deduction, The section 179 deduction for sport utility and certain other vehicles, and The total amount of the section 179 deduction, special depreciation allowance, and depreciation deduction (discussed later ) you can claim for a qualified property. Tax extension online Limit on the amount of the section 179 deduction. Tax extension online   For 2013, the total amount you can choose to deduct under section 179 generally cannot be more than $500,000. Tax extension online   If the cost of your section 179 property placed in service in 2013 is over $2,000,000, you must reduce the $500,000 dollar limit (but not below zero) by the amount of cost over $2,000,000. Tax extension online If the cost of your section 179 property placed in service during 2013 is $2,500,000 or more, you cannot take a section 179 deduction. Tax extension online   The total amount you can deduct under section 179 each year after you apply the limits listed above cannot be more than the taxable income from the active conduct of any trade or business during the year. Tax extension online   If you are married and file a joint return, you and your spouse are treated as one taxpayer in determining any reduction to the dollar limit, regardless of which of you purchased the property or placed it in service. Tax extension online   If you and your spouse file separate returns, you are treated as one taxpayer for the dollar limit. Tax extension online You must allocate the dollar limit (after any reduction) between you. Tax extension online   For more information on the above section 179 deduction limits, see Publication 946. Tax extension online Limit for sport utility and certain other vehicles. Tax extension online   For sport utility and certain other vehicles placed in service in 2013, the portion of the vehicle's cost taken into account in figuring your section 179 deduction is limited to $25,000. Tax extension online This rule applies to any four-wheeled vehicle primarily designed or used to carry passengers over public streets, roads, or highways, that is not subject to any of the passenger automobile limits explained under Depreciation Limits , later, and that is rated at no more than 14,000 pounds gross vehicle weight. Tax extension online However, the $25,000 limit does not apply to any vehicle: Designed to have a seating capacity of more than nine persons behind the driver's seat, Equipped with a cargo area of at least 6 feet in interior length that is an open area or is designed for use as an open area but is enclosed by a cap and is not readily accessible directly from the passenger compartment, or That has an integral enclosure, fully enclosing the driver compartment and load carrying device, does not have seating rearward of the driver's seat, and has no body section protruding more than 30 inches ahead of the leading edge of the windshield. Tax extension online    Limit on total section 179, special depreciation allowance, and depreciation deduction. Tax extension online   Generally, the total amount of section 179, special depreciation allowance, and depreciation deduction you can claim for a car that is qualified property and that you placed in service in 2013 is $11,160. Tax extension online The limit is reduced if your business use of the car is less than 100%. Tax extension online See Depreciation Limits , later, for more information. Tax extension online Example. Tax extension online In the earlier example under More than 50% business use requirement, Peter had a car with a cost (for purposes of the section 179 deduction) of $14,700. Tax extension online However, based on Peter's business usage of his car, the total of his section 179, special depreciation allowance, and depreciation deductions is limited to $6,696 ($11,160 limit x 60% business use). Tax extension online Cost of car. Tax extension online   For purposes of the section 179 deduction, the cost of the car does not include any amount figured by reference to any other property held by you at any time. Tax extension online For example, if you buy (for cash and a trade-in) a new car to use in your business, your cost for purposes of the section 179 deduction does not include your adjusted basis in the car you trade in for the new car. Tax extension online Your cost includes only the cash you paid. Tax extension online Basis of car for depreciation. Tax extension online   The amount of the section 179 deduction reduces your basis in your car. Tax extension online If you choose the section 179 deduction, you must subtract the amount of the deduction from the cost of your car. Tax extension online The resulting amount is the basis in your car you use to figure your depreciation deduction. Tax extension online When to choose. Tax extension online   If you want to take the section 179 deduction, you must make the choice in the tax year you place the car in service for business or work. Tax extension online How to choose. Tax extension online    Employees use Form 2106 to make this choice and report the section 179 deduction. Tax extension online All others use Form 4562. Tax extension online   File the appropriate form with either of the following. Tax extension online Your original tax return filed for the year the property was placed in service (whether or not you file it timely). Tax extension online An amended return filed within the time prescribed by law. Tax extension online An election made on an amended return must specify the item of section 179 property to which the election applies and the part of the cost of each such item to be taken into account. Tax extension online The amended return must also include any resulting adjustments to taxable income. Tax extension online    You must keep records that show the specific identification of each piece of qualifying section 179 property. Tax extension online These records must show how you acquired the property, the person you acquired it from, and when you placed it in service. Tax extension online Revoking an election. Tax extension online   An election (or any specification made in the election) to take a section 179 deduction for 2013 can only be revoked with the Commissioner's approval. Tax extension online Recapture of section 179 deduction. Tax extension online   To be eligible to claim the section 179 deduction, you must use your car more than 50% for business or work in the year you acquired it. Tax extension online If your business use of the car is 50% or less in a later tax year during the recovery period, you have to recapture (include in income) in that later year any excess depreciation. Tax extension online Any section 179 deduction claimed on the car is included in calculating the excess depreciation. Tax extension online For information on this calculation, see Excess depreciation , later in this chapter under Car Used 50% or Less for Business. Tax extension online Dispositions. Tax extension online   If you dispose of a car on which you had claimed the section 179 deduction, the amount of that deduction is treated as a depreciation deduction for recapture purposes. Tax extension online You treat any gain on the disposition of the property as ordinary income up to the amount of the section 179 deduction and any allowable depreciation (unless you establish the amount actually allowed). Tax extension online For information on the disposition of a car, see Disposition of a Car , later. Tax extension online Special Depreciation Allowance You may be able to claim the special depreciation allowance for your car, truck, or van, if it is qualified property and was placed in service in 2013. Tax extension online The allowance is an additional depreciation deduction of 50% of the car's depreciable basis (after any section 179 deduction, but before figuring your regular depreciation deduction under MACRS). Tax extension online The special depreciation allowance applies only for the first year the car is placed in service. Tax extension online To qualify for the allowance more than 50% of the use of the car must be in a qualified business use (as defined under Depreciation Deduction, later). Tax extension online Combined depreciation. Tax extension online   Your combined section 179 deduction, special depreciation allowance, and regular MACRS depreciation deduction is limited to the maximum allowable depreciation deduction for cars of $11,160 ($3,160 if you elect not to claim the special depreciation allowance). Tax extension online For trucks and vans, the first-year limit remains at $11,360 ($3,360 if you elect not to claim the special depreciation allowance). Tax extension online See Depreciation Limits , later in this chapter. Tax extension online Qualified car. Tax extension online   To be a qualified car (including trucks and vans), the car must meet all of the following tests. Tax extension online You purchased the car new on or after January 1, 2008, but only if no binding written contract to acquire the car existed before January 1, 2008, You placed the car in service in your trade or business before January 1, 2014, You used the car more than 50% in a qualified business use. Tax extension online Election not to claim the special depreciation allowance. Tax extension online   You can elect not to claim the special depreciation allowance for your car, truck, or van, that is qualified property. Tax extension online If you make this election, it applies to all 5-year property placed in service during the year. Tax extension online   To make the election, attach a statement to your timely filed return (including extensions) indicating the class of property (5-year for cars) for which you are making the election and that you are electing not to claim the special depreciation allowance for qualified property acquired on or after January 1, 2008. Tax extension online    Unless you elect not to claim the special depreciation allowance, you must reduce the car's adjusted basis by the amount of the allowance, even if the allowance was not claimed. Tax extension online Depreciation Deduction If you use actual car expenses to figure your deduction for a car you own and use in your business, you can claim a depreciation deduction. Tax extension online This means you can deduct a certain amount each year as a recovery of your cost or other basis in your car. Tax extension online You generally need to know the following things about the car you intend to depreciate. Tax extension online Your basis in the car. Tax extension online The date you place the car in service. Tax extension online The method of depreciation and recovery period you will use. Tax extension online Basis. Tax extension online   Your basis in a car for figuring depreciation is generally its cost. Tax extension online This includes any amount you borrow or pay in cash, other property, or services. Tax extension online   Generally, you figure depreciation on your car, truck, or van using your unadjusted basis (see Unadjusted basis , later). Tax extension online However, in some situations you will use your adjusted basis (your basis reduced by depreciation allowed or allowable in earlier years). Tax extension online For one of these situations see Exception under Methods of depreciation, later. Tax extension online   If you change the use of a car from personal to business, your basis for depreciation is the lesser of the fair market value or your adjusted basis in the car on the date of conversion. Tax extension online Additional rules concerning basis are discussed later in this chapter under Unadjusted basis . Tax extension online Placed in service. Tax extension online   You generally place a car in service when it is available for use in your work or business, in an income-producing activity, or in a personal activity. Tax extension online Depreciation begins when the car is placed in service for use in your work or business or for the production of income. Tax extension online   For purposes of computing depreciation, if you first start using the car only for personal use and later convert it to business use, you place the car in service on the date of conversion. Tax extension online Car placed in service and disposed of in the same year. Tax extension online   If you place a car in service and dispose of it in the same tax year, you cannot claim any depreciation deduction for that car. Tax extension online Methods of depreciation. Tax extension online   Generally, you figure depreciation on cars using the Modified Accelerated Cost Recovery System (MACRS). Tax extension online MACRS is discussed later in this chapter. Tax extension online Exception. Tax extension online   If you used the standard mileage rate in the first year of business use and change to the actual expenses method in a later year, you cannot depreciate your car under the MACRS rules. Tax extension online You must use straight line depreciation over the estimated remaining useful life of the car. Tax extension online   To figure depreciation under the straight line method, you must reduce your basis in the car (but not below zero) by a set rate per mile for all miles for which you used the standard mileage rate. Tax extension online The rate per mile varies depending on the year(s) you used the standard mileage rate. Tax extension online For the rate(s) to use, see Depreciation adjustment when you used the standard mileage rate under Disposition of a Car, later. Tax extension online   This reduction of basis is in addition to those basis adjustments described later under Unadjusted basis . Tax extension online You must use your adjusted basis in your car to figure your depreciation deduction. Tax extension online For additional information on the straight line method of depreciation, see Publication 946. Tax extension online More-than-50%-use test. Tax extension online   Generally, you must use your car more than 50% for qualified business use (defined next) during the year to use MACRS. Tax extension online You must meet this more-than-50%-use test each year of the recovery period (6 years under MACRS) for your car. Tax extension online   If your business use is 50% or less, you must use the straight line method to depreciate your car. Tax extension online This is explained later under Car Used 50% or Less for Business . Tax extension online Qualified business use. Tax extension online   A qualified business use is any use in your trade or business. Tax extension online It does not include use for the production of income (investment use). Tax extension online However, you do combine your business and investment use to compute your depreciation deduction for the tax year. Tax extension online Use of your car by another person. Tax extension online   Do not treat any use of your car by another person as use in your trade or business unless that use meets one of the following conditions. Tax extension online It is directly connected with your business. Tax extension online It is properly reported by you as income to the other person (and, if you have to, you withhold tax on the income). Tax extension online It results in a payment of fair market rent. Tax extension online This includes any payment to you for the use of your car. Tax extension online Business use changes. Tax extension online   If you used your car more than 50% in qualified business use in the year you placed it in service, but 50% or less in a later year (including the year of disposition), you have to change to the straight line method of depreciation. Tax extension online See Qualified business use 50% or less in a later year under Car Used 50% or Less for Business, later. Tax extension online    Property does not cease to be used more than 50% in qualified business use by reason of a transfer at death. Tax extension online Use for more than one purpose. Tax extension online   If you use your car for more than one purpose during the tax year, you must allocate the use to the various purposes. Tax extension online You do this on the basis of mileage. Tax extension online Figure the percentage of qualified business use by dividing the number of miles you drive your car for business purposes during the year by the total number of miles you drive the car during the year for any purpose. Tax extension online Change from personal to business use. Tax extension online   If you change the use of a car from 100% personal use to business use during the tax year, you may not have mileage records for the time before the change to business use. Tax extension online In this case, you figure the percentage of business use for the year as follows. Tax extension online Determine the percentage of business use for the period following the change. Tax extension online Do this by dividing business miles by total miles driven during that period. Tax extension online Multiply the percentage in (1) by a fraction. Tax extension online The numerator (top number) is the number of months the car is used for business and the denominator (bottom number) is 12. Tax extension online Example. Tax extension online You use a car only for personal purposes during the first 6 months of the year. Tax extension online During the last 6 months of the year, you drive the car a total of 15,000 miles of which 12,000 miles are for business. Tax extension online This gives you a business use percentage of 80% (12,000 ÷ 15,000) for that period. Tax extension online Your business use for the year is 40% (80% × 6/12). Tax extension online Limits. Tax extension online   The amount you can claim for section 179, special depreciation allowance, and depreciation deductions may be limited. Tax extension online The maximum amount you can claim depends on the year in which you placed your car in service. Tax extension online You have to reduce the maximum amount if you did not use the car exclusively for business. Tax extension online See Depreciation Limits , later. Tax extension online Unadjusted basis. Tax extension online   You use your unadjusted basis (often referred to as your basis or your basis for depreciation) to figure your depreciation using the MACRS depreciation chart, explained later under Modified Accelerated Cost Recovery System (MACRS) . Tax extension online Your unadjusted basis for figuring depreciation is your original basis increased or decreased by certain amounts. Tax extension online   To figure your unadjusted basis, begin with your car's original basis, which generally is its cost. Tax extension online Cost includes sales taxes (see Sales taxes , earlier), destination charges, and dealer preparation. Tax extension online Increase your basis by any substantial improvements you make to your car, such as adding air conditioning or a new engine. Tax extension online Decrease your basis by any section 179 deduction, special depreciation allowance, gas guzzler tax, clean-fuel vehicle deduction (for vehicles placed in service before Jan. Tax extension online 1, 2006), and alternative motor vehicle credit. Tax extension online   See Form 8910 for information on the alternative motor vehicle credit. Tax extension online If your business use later falls to 50% or less, you may have to recapture (include in your income) any excess depreciation. Tax extension online See Car Used 50% or Less for Business, later, for more information. Tax extension online If you acquired the car by gift or inheritance, see Publication 551, Basis of Assets, for information on your basis in the car. Tax extension online Improvements. Tax extension online   A major improvement to a car is treated as a new item of 5-year recovery property. Tax extension online It is treated as placed in service in the year the improvement is made. Tax extension online It does not matter how old the car is when the improvement is added. Tax extension online Follow the same steps for depreciating the improvement as you would for depreciating the original cost of the car. Tax extension online However, you must treat the improvement and the car as a whole when applying the limits on the depreciation deductions. Tax extension online Your car's depreciation deduction for the year (plus any section 179 deduction, special depreciation allowance, and depreciation on any improvements) cannot be more than the depreciation limit that applies for that year. Tax extension online See Depreciation Limits , later. Tax extension online Car trade-in. Tax extension online   If you traded one car (the “old car”) for another car (the “new car”) in 2013, there are two ways you can treat the transaction. Tax extension online You can elect to treat the transaction as a tax-free disposition of the old car and the purchase of the new car. Tax extension online If you make this election, you treat the old car as disposed of at the time of the trade-in. Tax extension online The depreciable basis of the new car is the adjusted basis of the old car (figured as if 100% of the car's use had been for business purposes) plus any additional amount you paid for the new car. Tax extension online You then figure your depreciation deduction for the new car beginning with the date you placed it in service. Tax extension online You make this election by completing Form 2106, Part II, Section D. Tax extension online This method is explained later, beginning at Effect of trade-in on basis . Tax extension online If you do not make the election described in (1), you must figure depreciation separately for the remaining basis of the old car and for any additional amount you paid for the new car. Tax extension online You must apply two depreciation limits (see Depreciation Limits , later). Tax extension online The limit that applies to the remaining basis of the old car generally is the amount that would have been allowed had you not traded in the old car. Tax extension online The limit that applies to the additional amount you paid for the new car generally is the limit that applies for the tax year, reduced by the depreciation allowance for the remaining basis of the old car. Tax extension online You must use Form 4562 to compute your depreciation deduction. Tax extension online You cannot use Form 2106, Part II, Section D. Tax extension online This method is explained in Publication 946. Tax extension online   If you elect to use the method described in (1), you must do so on a timely filed tax return (including extensions). Tax extension online Otherwise, you must use the method described in (2). Tax extension online Effect of trade-in on basis. Tax extension online   The discussion that follows applies to trade-ins of cars in 2013, where the election was made to treat the transaction as a tax-free disposition of the old car and the purchase of the new car. Tax extension online For information on how to figure depreciation for cars involved in a like-kind exchange (trade-in) in 2013, for which the election was not made, see Publication 946 and Regulations section 1. Tax extension online 168(i)-6(d)(3). Tax extension online Traded car used only for business. Tax extension online   If you trade in a car you used only in your business for another car that will be used only in your business, your original basis in the new car is your adjusted basis in the old car, plus any additional amount you pay for the new car. Tax extension online Example. Tax extension online Paul trades in a car that has an adjusted basis of $5,000 for a new car. Tax extension online In addition, he pays cash of $20,000 for the new car. Tax extension online His original basis of the new car is $25,000 (his $5,000 adjusted basis in the old car plus the $20,000 cash paid). Tax extension online Paul's unadjusted basis is $25,000 unless he claims the section 179 deduction, special depreciation allowance, or has other increases or decreases to his original basis, discussed under Unadjusted basis , earlier. Tax extension online Traded car used partly in business. Tax extension online   If you trade in a car you used partly in your business for a new car you will use in your business, you must make a “trade-in” adjustment for the personal use of the old car. Tax extension online This adjustment has the effect of reducing your basis in your old car, but not below zero, for purposes of figuring your depreciation deduction for the new car. Tax extension online (This adjustment is not used, however, when you determine the gain or loss on the later disposition of the new car. Tax extension online See Publication 544, Sales and Other Dispositions of Assets, for information on how to report the disposition of your car. Tax extension online )   To figure the unadjusted basis of your new car for depreciation, first add to your adjusted basis in the old car any additional amount you pay for the new car. Tax extension online Then subtract from that total the excess, if any, of: The total of the amounts that would have been allowable as depreciation during the tax years before the trade if 100% of the use of the car had been business and investment use, over The total of the amounts actually allowed as depreciation during those years. Tax extension online For information about figuring depreciation, see Modified Accelerated Cost Recovery System (MACRS) , which follows Example 2, later. Tax extension online Modified Accelerated Cost Recovery System (MACRS). Tax extension online   The Modified Accelerated Cost Recovery System (MACRS) is the name given to the tax rules for getting back (recovering) through depreciation deductions the cost of property used in a trade or business or to produce income. Tax extension online   The maximum amount you can deduct is limited, depending on the year you placed your car in service. Tax extension online See Depreciation Limits , later. Tax extension online Recovery period. Tax extension online   Under MACRS, cars are classified as 5-year property. Tax extension online You actually depreciate the cost of a car, truck, or van over a period of 6 calendar years. Tax extension online This is because your car is generally treated as placed in service in the middle of the year, and you claim depreciation for one-half of both the first year and the sixth year. Tax extension online Depreciation deduction for certain Indian reservation property. Tax extension online   Shorter recovery periods are provided under MACRS for qualified Indian reservation property placed in service on Indian reservations after 1993 and before 2014. Tax extension online The recovery that applies for a business-use car is 3 years instead of 5 years. Tax extension online However, the depreciation limits, discussed later, will still apply. Tax extension online   For more information on the qualifications for this shorter recovery period and the percentages to use in figuring the depreciation deduction, see chapter 4 of Publication 946. Tax extension online Depreciation methods. Tax extension online   You can use one of the following methods to depreciate your car. Tax extension online The 200% declining balance method (200% DB) over a 5-year recovery period that switches to the straight line method when that method provides an equal or greater deduction. Tax extension online The 150% declining balance method (150% DB) over a 5-year recovery period that switches to the straight line method when that method provides an equal or greater deduction. Tax extension online The straight line method (SL) over a 5-year recovery period. Tax extension online    If you use Table 4-1 (discussed later under MACRS depreciation chart) to determine your depreciation rate for 2013, you do not need to determine in what year using the straight line method provides an equal or greater deduction. Tax extension online This is because the chart has the switch to the straight line method built into its rates. Tax extension online   Before choosing a method, you may wish to consider the following facts. Tax extension online Using the straight line method provides equal yearly deductions throughout the recovery period. Tax extension online Using the declining balance methods provides greater deductions during the earlier recovery years with the deductions generally getting smaller each year. Tax extension online MACRS depreciation chart. Tax extension online   A 2013 MACRS Depreciation Chart and instructions are included in this chapter as Table 4-1 . Tax extension online Using this table will make it easy for you to figure the 2013 depreciation deduction for your car. Tax extension online A similar chart appears in the Instructions for Form 2106. Tax extension online    You may have to use the tables in Publication 946 instead of using this MACRS Depreciation Chart. Tax extension online   You must use the Depreciation Tables in Publication 946 rather than the 2013 MACRS Depreciation Chart in this publication if any one of the following four conditions applies to you. Tax extension online You file your return on a fiscal year basis. Tax extension online You file your return for a short tax year (less than 12 months). Tax extension online During the year, all of the following conditions apply. Tax extension online You placed some property in service from January through September. Tax extension online You placed some property in service from October through December. Tax extension online Your basis in the property you placed in service from October through December (excluding nonresidential real property, residential rental property, and property placed in service and disposed of in the same year) was more than 40% of your total bases in all property you placed in service during the year. Tax extension online   You placed qualified property in service on an Indian reservation. Tax extension online Depreciation in future years. Tax extension online   If you use the percentages from the chart, you generally must continue to use them for the entire recovery period of your car. Tax extension online However, you cannot continue to use the chart if your basis in your car is adjusted because of a casualty. Tax extension online In that case, for the year of the adjustment and the remaining recovery period, figure the depreciation without the chart using your adjusted basis in the car at the end of the year of the adjustment and over the remaining recovery period. Tax extension online See Figuring the Deduction Without Using the Tables in chapter 4 of Publication 946. Tax extension online    In future years, do not use the chart in this edition of the publication. Tax extension online Instead, use the chart in the publication or the form instructions for those future years. Tax extension online Disposition of car during recovery period. Tax extension online   If you dispose of the car before the end of the recovery period, you are generally allowed a half year of depreciation in the year of disposition unless you purchased the car during the last quarter of a year. Tax extension online See Depreciation deduction for the year of disposition under Disposition of a Car, later, for information on how to figure the depreciation allowed in the year of disposition. Tax extension online How to use the 2013 chart. Tax extension online   To figure your depreciation deduction for 2013, find the percentage in the column of Table 4-1 based on the date that you first placed the car in service and the depreciation method that you are using. Tax extension online Multiply the unadjusted basis of your car (defined earlier) by that percentage to determine the amount of your depreciation deduction. Tax extension online If you prefer to figure your depreciation deduction without the help of the chart, see Publication 946. Tax extension online    Your deduction cannot be more than the maximum depreciation limit for cars. Tax extension online See Depreciation Limits, later. Tax extension online Example. Tax extension online Phil bought a used truck in February 2012 to use exclusively in his landscape business. Tax extension online He paid $9,200 for the truck with no trade-in. Tax extension online Phil did not claim any section 179 deduction, the truck did not qualify for the special depreciation allowance, and he chose to use the 200% DB method to get the largest depreciation deduction in the early years. Tax extension online Phil used the MACRS depreciation chart in 2012 to find his percentage. Tax extension online The unadjusted basis of his truck equals its cost because Phil used it exclusively for business. Tax extension online He multiplied the unadjusted basis of his truck, $9,200, by the percentage that applied, 20%, to figure his 2012 depreciation deduction of $1,840. Tax extension online In 2013, Phil used the truck for personal purposes when he repaired his father's cabin. Tax extension online His records show that the business use of his truck was 90% in 2013. Tax extension online Phil used Table 4-1 to find his percentage. Tax extension online Reading down the first column for the date placed in service and across to the 200% DB column, he locates his percentage, 32%. Tax extension online He multiplies the unadjusted basis of his truck, $8,280 ($9,200 cost × 90% business use), by 32% to figure his 2013 depreciation deduction of $2,650. Tax extension online Depreciation Limits There are limits on the amount you can deduct for depreciation of your car, truck, or van. Tax extension online The section 179 deduction and special depreciation allowance are treated as depreciation for purposes of the limits. Tax extension online The maximum amount you can deduct each year depends on the year you place the car in service. Tax extension online These limits are shown in the following tables. Tax extension online   Maximum Depreciation Deduction for Cars Date       4th & Placed 1st 2nd 3rd Later In Service Year Year Year Years 2012–2013 $11,1601 $5,100 $3,050 $1,875 2010–2011 11,0602 4,900 2,950 1,775 2008–2009 10,9603 4,800 2,850 1,775 2007 3,060 4,900 2,850 1,775 2006 2,960 4,800 2,850 1,775 2005 2,960 4,700 2,850 1,675 2004 10,6103 4,800 2,850 1,675 5/06/2003– 12/31/2003 10,7104 4,900 2,950 1,775 1/01/2003– 5/05/2003 7,6605 4,900 2,950 1,775 2001–2002 7,6605 4,900 2,950 1,775 2000 3,060 4,900 2,950 1,775 1$3,160 if the car is not qualified property or if you elect not to claim the special depreciation allowance. Tax extension online 2$3,060 if the car is not qualified property or if you elect not to claim the special depreciation allowance. Tax extension online 3$2,960 if the car is not qualified property or if you elect not to claim the special depreciation allowance. Tax extension online 4$7,660 if you acquired the car before 5/6/2003. Tax extension online $3,060 if the car is not qualified property or if you elect not to claim any special depreciation allowance. Tax extension online 5$3,060 if you acquired the car before 9/11/2001, the car is not qualified property, or you elect not to claim the special depreciation allowance. Tax extension online Trucks and vans. Tax extension online   For 2013, the maximum depreciation deductions for trucks and vans are generally higher than those for cars. Tax extension online A truck or van is a passenger automobile that is classified by the manufacturer as a truck or van and rated at 6,000 pounds gross vehicle weight or less. Tax extension online For trucks and vans placed in service before 2003, use the Maximum Depreciation Deduction for Cars table. Tax extension online Maximum Depreciation Deduction for Trucks and Vans Date       4th & Placed 1st 2nd 3rd Later In Service Year Year Year Years 2013 $11,3601 $5,400 $3,250 $1,975 2012 $11,3601 $5,300 $3,150 $1,875 2011 11,2601 5,200 3,150 1,875 2010 11,1601 5,100 3,050 1,875 2009 11,0601 4,900 2,950 1,775 2008 11,1601 5,100 3,050 1,875 2007 3,260 5,200 3,050 1,875 2005–2006 3,260 5,200 3,150 1,875 2004 10,9101 5,300 3,150 1,875 2003 11,0101,2 5,400 3,250 1,975 1If the special depreciation allowance does not apply or you make the election not to claim the special depreciation allowance, the first-year limit is $3,360 for 2012 and 2013, $3,260 for 2011, $3,160 for 2010, $3,060 for 2009, $3,160 for 2008, $3,260 for 2004, and $3,360 for 2003. Tax extension online 2If the truck or van was acquired before 5/06/2003, the truck or van is qualified property, and you claim the special depreciation allowance for the truck or van, the maximum deduction is $7,960. Tax extension online Car used less than full year. Tax extension online   The depreciation limits are not reduced if you use a car for less than a full year. Tax extension online This means that you do not reduce the limit when you either place a car in service or dispose of a car during the year. Tax extension online However, the depreciation limits are reduced if you do not use the car exclusively for business and investment purposes. Tax extension online See Reduction for personal use , next. Tax extension online Reduction for personal use. Tax extension online   The depreciation limits are reduced based on your percentage of personal use. Tax extension online If you use a car less than 100% in your business or work, you must determine the depreciation deduction limit by multiplying the limit amount by the percentage of business and investment use during the tax year. Tax extension online Section 179 deduction. Tax extension online   The section 179 deduction is treated as a depreciation deduction. Tax extension online If you place a car that is not a truck or van in service in 2013, use it only for business, and choose the section 179 deduction, the special depreciation allowance, and the depreciation deduction for that car for 2013 is limited to $11,160. Tax extension online Example. Tax extension online On September 4, 2013, Jack bought a used car for $10,000 and placed it in service. Tax extension online He used it 80% for his business, and he chooses to take a section 179 deduction for the car. Tax extension online The car is not qualified property for purposes of the special depreciation allowance. Tax extension online Before applying the limit, Jack figures his maximum section 179 deduction to be $8,000. Tax extension online This is the cost of his qualifying property (up to the maximum $500,000 amount) multiplied by his business use ($10,000 × 80%). Tax extension online Jack then figures that his section 179 deduction for 2013 is limited to $2,528 (80% of $3,160). Tax extension online He then figures his unadjusted basis of $5,472 (($10,000 × 80%) − $2,528) for determining his depreciation deduction. Tax extension online Jack has reached his maximum depreciation deduction for 2013. Tax extension online For 2014, Jack will use his unadjusted basis of $5,472 to figure his depreciation deduction. Tax extension online Deductions in years after the recovery period. Tax extension online   If the depreciation deductions for your car are reduced under the passenger automobile limits (discussed earlier), you will have unrecovered basis in your car at the end of the recovery period. Tax extension online If you continue to use your car for business, you can deduct that unrecovered basis (subject to depreciation limits) after the recovery period ends. Tax extension online Unrecovered basis. Tax extension online   This is your cost or other basis in the car reduced by any clean-fuel vehicle deduction (for vehicles placed in service before January 1, 2006), alternative motor vehicle credit, electric vehicle credit, gas guzzler tax, and depreciation (including any special depreciation allowance , discussed earlier, unless you elect not to claim it) and section 179 deductions that would have been allowable if you had used the car 100% for business and investment use. Tax extension online The recovery period. Tax extension online   For 5-year property, your recovery period is 6 calendar years. Tax extension online A part year's depreciation is allowed in the first calendar year, a full year's depreciation is allowed in each of the next 4 calendar years, and a part year's depreciation is allowed in the 6th calendar year. Tax extension online   Under MACRS, your recovery period is the same whether you use declining balance or straight line depreciation. Tax extension online You determine your unrecovered basis in the 7th year after you placed the car in service. Tax extension online How to treat unrecovered basis. Tax extension online   If you continue to use your car for business after the recovery period, you can claim a depreciation deduction in each succeeding tax year until you recover your basis in the car. Tax extension online The maximum amount you can deduct each year is determined by the date you placed the car in service and your business-use percentage. Tax extension online For example, no deduction is allowed for a year you use your car 100% for personal purposes. Tax extension online Example. Tax extension online In April 2007, Bob bought and placed in service a car he used exclusively in his business. Tax extension online The car cost $31,500. Tax extension online Bob did not claim a section 179 deduction or the special depreciation allowance for the car. Tax extension online He continued to use the car 100% in his business throughout the recovery period (2007 through 2012). Tax extension online For those years, Bob used the MACRS Depreciation Chart (200% declining balance method) and the Maximum Depreciation Deduction for Cars table, earlier, for the applicable tax year to compute his depreciation deductions during the recovery period. Tax extension online Bob's depreciation deductions were subject to the depreciation limits so he will have unrecovered basis at the end of the recovery period as shown in the following table. Tax extension online      MACRS     Deprec. Tax extension online Year % Amount Limit Allowed 2007 20. Tax extension online 00 $6,300 $3,060 $ 3,060 2008 32. Tax extension online 00 10,080 4,900 4,900 2009 19. Tax extension online 20 6,048 2,850 2,850 2010 11. Tax extension online 52 3,629 1,775 1,775 2011 11. Tax extension online 52 3,629 1,775 1,775 2012 5. Tax extension online 76 1,814 1,775 1,775 Total $31,500   16,135 For the correct limit, see Maximum Depreciation Deduction for Cars under “Depreciation Limits,” earlier, for the maximum amount of depreciation allowed each year. Tax extension online   At the end of 2012, Bob had an unrecovered basis in the car of $15,365 ($31,500 – $16,135). Tax extension online If Bob continued to use the car 100% for business in 2013 and later years, he can claim a depreciation deduction equal to the lesser of $1,775 or his remaining unrecovered basis. Tax extension online   If Bob's business use of the car was less than 100% during any year, his depreciation deduction would be less than the maximum amount allowable for that year. Tax extension online However, in determining his unrecovered basis in the car, he would still reduce his original basis by the maximum amount allowable as if the business use had been 100%. Tax extension online For example, if Bob had used his car 60% for business instead of 100%, his allowable depreciation deductions would have been $9,681 ($16,135 × 60%), but he still would have to reduce his basis by $16,135 to determine his unrecovered basis. Tax extension online Table 4-1. Tax extension online 2013 MACRS Depreciation Chart (Use to Figure Depreciation for 2013. Tax extension online ) If you claim actual expenses for your car, use the chart below to find the depreciation method and percentage to use for your 2013 return for cars placed in service in 2013. Tax extension online   First, using the left column, find the date you first placed the car in service in 2013. Tax extension online Then select the depreciation method and percentage from column (a), (b), or (c) following the rules explained in this chapter. Tax extension online For cars placed in service before 2013, you must use the same method you used on last year's return unless a decline in your business use requires you to change to the straight line method. Tax extension online Refer back to the MACRS Depreciation Chart for the year you placed the car in service. Tax extension online (See Car Used 50% or Less for Business . Tax extension online )  Multiply the unadjusted basis of your car by your business use percentage. Tax extension online Multiply the result by the percentage you found in the chart to find the amount of your depreciation deduction for 2013. Tax extension online (Also see Depreciation Limits . Tax extension online )   If you placed your car in service after September of any year and you placed other business property in service during the same year, you may have to use the Jan. Tax extension online 1—Sept. Tax extension online 30 percentage instead of the Oct. Tax extension online 1—Dec. Tax extension online 31 percentage for your car. Tax extension online               To find out if this applies to you, determine: 1) the basis of all business property you placed in service after September of that year and 2) the basis of all business property you placed in service during that entire year. Tax extension online If the basis of the property placed in service after September is not more than 40% of the basis of all property (certain property is excluded) placed in service for the entire year, use the percentage for Jan. Tax extension online 1—Sept. Tax extension online 30 for figuring depreciation for your car. Tax extension online See Which Convention Applies? in chapter 4 of Publication 946 for more details. Tax extension online               Example. Tax extension online You buy machinery (basis of $32,000) in May 2013 and a new van (basis of $20,000) in October 2013, both used 100% in your business. Tax extension online You
Español

Use This Checklist to Plan Your Purchase:

  • Decide in advance exactly what you want and what you can afford.
  • Do your research. Ask family, friends and others you trust for advice based on their experience. Gather information about the seller and the item or service you are purchasing.
  • Review product test results and other information from consumer experts.
  • Get advice and price quotes from several sellers.
  • Make sure that the seller has all appropriate licenses. Doctors, lawyers, contractors and other service providers must register with a state or local licensing agency.
  • Check out a company's complaint record with your local consumer affairs office and Better Business Bureau.
  • Get a written copy of guarantees and warranties. Compare their features.
  • Get the seller's refund, return and cancellation policies.
  • Sometimes retailers do not update cash register scanners with updated prices. If you think the price displayed isn't right, speak up.
  • Ask whom to contact if you have a question or problem.
  • Read and understand any contract or legal document you are asked to sign. Make sure there are no blank spaces. Insist that any extras you are promised be put in writing.
  • Consider paying by credit card. If you have a problem, you can dispute a charge made on your credit card.
  • Don't buy on impulse or under pressure. This includes donating to charity.

The Tax Extension Online

Tax extension online Publication 561 - Additional Material Table of Contents Tax Publications for Individual Taxpayers and Commonly Used Tax Forms Tax Publications for Individual Taxpayers and Commonly Used Tax Forms. Tax extension online  Summary: This is a listing of tax publications and commonly used tax forms. Tax extension online The text states:Tax Publications for Individual Taxpayers. Tax extension online  See How to Get Tax Help for a variety of ways to get publications, including by computer, phone, and mail. Tax extension online General Guides. Tax extension online   1--Your Rights as a Taxpayer 17--Your Federal Income Tax (For Individuals) 334--Tax Guide for Small Business (For Individuals Who Use Schedule C or C-EZ) 509--Tax Calendars for 2007 553--Highlights of 2006 Tax Changes 910--IRS Guide to Free Tax Services Specialized Publications. Tax extension online   3--Armed Forces' Tax Guide 54--Tax Guide for U. Tax extension online S. Tax extension online Citizens and Residents Aliens Abroad 225--Farmer's Tax Guide 463--Travel, Entertainment, Gift, and Car Expenses 501--Exemptions, Standard Deduction, and Filing Information 502--Medical and Dental Expenses 503--Child and Dependent Care Expenses 504--Divorced or Separated Individuals 505--Tax Withholding and Estimated Tax 514--Foreign Tax Credit for Individuals 516--U. Tax extension online S. Tax extension online Government Civilian Employees Stationed Abroad 517--Social Security and Other Information for Members of the Clergy and Religious Workers 519--U. Tax extension online S. Tax extension online Tax Guide for Aliens 520--Scholarships and Fellowships 521--Moving Expenses 523--Selling Your Home 524--Credit for the Elderly or the Disabled 525--Taxable and Nontaxable Income 526--Charitable Contributions 527--Residential Rental Property 529--Miscellaneous Deductions 530--Tax Information for First-Time Homeowners 531--Reporting Tip Income 536--Net Operating Losses (NOLs) for Individuals, Estates, and Trusts 537--Installment Sales 541--Partnerships 544--Sales and Other Dispositions of Assets 547--Casualties, Disasters, and Thefts 550--Investment Income and Expenses 551--Basis of Assets 552--Recordkeeping for Individuals 554--Older Americans' Tax Guide 555--Community Property 556--Examination of Returns, Appeal Rights, and Claims for Refund 559--Survivors, Executors, and Administrators 561--Determining the Value of Donated Property 564--Mutual Fund Distributions 570--Tax Guide for Individuals With Income From U. Tax extension online S. Tax extension online Possessions 571--Tax-Sheltered Annuity Plans (403(b) Plans) 575--Pension and Annuity Income 584--Casualty, Disaster, and Theft Loss Workbook (Personal-Use Property) 587--Business Use of Your Home (Including Use by Daycare Providers) 590--Individual Retirement Arrangements (IRAs) 593--Tax Highlights for U. Tax extension online S. Tax extension online Citizens and Residents Going Abroad 594--What You Should Know About the IRS Collection Process 596--Earned Income Credit (EIC) 721--Tax Guide to U. Tax extension online S. Tax extension online Civil Service Retirement Benefits 901--U. Tax extension online S. Tax extension online Tax Treaties 907--Tax Highlights for Persons with Disabilities 908--Bankruptcy Tax Guide 915--Social Security and Equivalent Railroad Retirement Benefits 919--How Do I Adjust My Tax Withholding? 925--Passive Activity and At-Risk Rules 926--Household Employer's Tax Guide 929--Tax Rules for Children and Dependents 936--Home Mortgage Interest Deduction 946--How to Depreciate Property 947--Practice Before the IRS and Power of Attorney 950--Introduction to Estate and Gift Taxes 967--The IRS Will Figure Your Tax 969--Health Savings Accounts and Other Tax-Favored Health Plans 970--Tax Benefits for Education 971--Innocent Spouse Relief 972--Child Tax Credit 1542--Per Diem Rates 1544--Reporting Cash Payments of Over $10,000 (Received in a Trade or Business) 1546--The Taxpayer Advocate Service of the IRS - How to Get Help With Unresolved Tax Problems Spanish Language Publications. Tax extension online   1SP--Derechos del Contribuyente 579SP--Cómo Preparar la Declaración de Impuesto Federal 594SP--Que es lo que Debemos Saber sobre el Proceso de Cobro del IRS 596SP--Crédito por Ingreso del Trabajo 850--English-Spanish Glossary of Words and Phrases Used in Publications Issued by the Internal Revenue Service 1544SP--Informe de Pagos en Efectivo en Exceso de $10,000 (Recibidos en una Ocupación o Negocio) Commonly Used Tax Forms. Tax extension online  See How To Get Tax Help for a variety of ways to get forms, including by computer, fax, phone, and mail. Tax extension online 1040--U. Tax extension online S. Tax extension online Individual Income Tax Return Schedule A&B--Itemized Deductions & Interest and Ordinary Dividends Schedule C--Profit or Loss From Business Schedule C-EZ--Net Profit From Business Schedule D--Capital Gains and Losses Schedule D-1--Continuation Sheet for Schedule D Schedule E--Supplemental Income and Loss Schedule EIC--Earned Income Credit Schedule F--Profit or Loss From Farming Schedule H--Household Employment Taxes Schedule J--Income Averaging for Farmers and Fishermen Schedule R--Credit for the Elderly or the Disabled Schedule SE--Self-Employment Tax 1040A--U. Tax extension online S. Tax extension online Individual Income Tax Return Schedule 1--Interest and Ordinary Dividends for Form 1040A Filers Schedule 2--Child and Dependent Care Expenses for Form 1040A Filers Schedule 3--Credit for the Elderly or the Disabled for Form 1040A Filers 1040EZ--Income Tax Return for Single and Joint Filers With No Dependents 1040-ES--Estimated Tax for Individuals 1040X--Amended U. Tax extension online S. Tax extension online Individual Income Tax Return 2106--Employee Business Expenses 2106-EZ--Unreimbursed Employee Business Expenses 2210--Underpayment of Estimated Tax by Individuals, Estates, and Trusts 2441--Child and Dependent Care Expenses 2848--Power of Attorney and Declaration of Representative 3903--Moving Expenses 4562--Depreciation and Amortization 4868--Application for Automatic Extension of Time To File U. Tax extension online S. Tax extension online Individual Income Tax Return 4952--Investment Interest Expense Deduction 5329--Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts 6251--Alternative Minimum Tax--Individuals 8283--Noncash Charitable Contributions 8582--Passive Activity Loss Limitations 8606--Nondeductible IRAs 8812--Additional Child Tax Credit 8822--Change of Address 8829--Expenses for Business Use of Your Home 8863--Education Credits 9465--Installment Agreement Request Prev  Up  Next   Home   More Online Publications