Car/Truck Expenses Form 2106/Form 4562

This information is for Car and Truck Expenses and Depreciation Deduction for Vehicle(s) being taken on Schedule C, Schedule E, and Schedule F.

You will find information for claiming the Standard Mileage and Actual Expenses Method.

IMPORTANT

Make sure to only enter the Vehicle(s)/Asset(s) that belongs to the applicable Schedule.

Step 1. Once logged into your account, use the Search for a Form bar in the upper left to search for and add "Schedule C Profit or Loss from Business Assets".

Step 2. Select "Add New".

Step 4. Select "Click here to add a new Automobile entry" to enter a vehicle for either Car and Truck Expenses or Depreciation. Depending on the information entered, Form 2106 or Form 4562 will populate.

Required Information:

If you claim any deduction for the business use of a car, you must answer certain questions and provide information about the use of the car. The information relates to the following items.

• • Date placed in service.

  • Mileage (total, business, commuting, and other personal mileage).

  • Percentage of business use.

  • After-work use.

  • Use of other vehicles.

  • Whether you have evidence to support the deduction.

  • Whether or not the evidence is written.

Automobile Owned or Leased:

Select if the vehicle is owned or leased.

Expense Method:

Choose from:

• • Standard Mileage

  • Actual Expenses

  • Let the System Decide if you are unsure and can qualify for either.

Year Placed in Service:

Enter the year this vehicle was first placed in service.

About the Vehicle:

You will see the selected Ownership, and Method for expenses displayed on the top of the page.

Click the pencil to return to the following page to change a selection.

Description of Vehicle :

Generally, this will be the Year, Make, and Model of the vehicle.

See IRS Publication 463, and Form 4562 Instructions for information on what is considered a Truck or Van.

This page is included regardless of Ownership choice, and for both Standard Mileage Actual Expense Methods.

Click on the black triangle within the boxes to expand the drop-down menu. Select the applicable answer "Yes" or "No" to each question on the page.

Business Use Evidence:

The two questions in this section pertain to receipts, logs, record keeping of the expenses being claimed for this vehicle.

Vehicle Use:

• • Vehicle Available for Personal Use: This question is asking if you use this vehicle for personal use also.

  • Used by More Than 5% Owner:

  • Another Vehicle for Personal Use: Is there another vehicle you drive for personal use?

Personal Use Included in Income:

The questions in this section are for employee's claiming vehicle expenses.

Only include miles when vehicle was placed in service for this business.

Total business/investment miles driven in (current tax year):

Enter the total amount of miles this vehicle was driven for this business. Do not include commuting miles, or non-business miles here.

Commuting & Other Miles in (current tax year):

- Daily Round-trip: Enter the total commuting miles driven in one day.

- Total Commuting Miles: Enter the total commuting miles driven in year.

- Other Miles Driven: Enter here all other miles, including personal miles driven while vehicle.

Date Vehicle Placed in Service:

Enter the date this vehicle was first placed in service.

Months in Use:

Enter the number of months this vehicle was used for this business during the tax year of current return (1-12)

Parking Fees and Tolls:

Enter any business-related parking fees and tolls.

Special Depreciation Disallowance:

Check the box to not elect to claim the special depreciation allowance for the vehicle or if the vehicle is not qualified property.

Special Designations:

These two questions are for Qualified Liberty Zone Property and Electric Vehicle. (You must answer Yes or No for the page to save).

Once the listing is complete, the Asset Manager will display your listing.

You can see the method taken, and total expense.

Click "Edit this asset" to enter the listing.

Depreciation Deduction can only be taken on a vehicle that is using Actual Expense Method.

Standard Deduction Method does not allow a Depreciation Deduction.

Vehicle Information:

About the Vehicle:

You will see the selected Ownership, and Method for expenses displayed on the top of the page.

Click the pencil to return to the following page to change a selection.

Description of Vehicle:

Generally, this will be the Year, Make, and Model of the vehicle.

This page is included regardless of Ownership choice, and for both Standard Mileage Actual Expense Methods.

Click on the black triangle within the boxes to expand the drop-down menu. Select the applicable answer "Yes" or "No" to each question on the page.

Business Use Evidence:

The two questions in this section pertain to receipts, logs, record keeping of the expenses being claimed for this vehicle.

Vehicle Use:

- Vehicle Available for Personal Use: This question is asking if you use this vehicle for personal use also.

- Used by More Than 5% Owner:

- Another Vehicle for Personal Use: Is there another vehicle you drive for personal use?

Personal Use Included in Income:

The questions in this section are for employee's claiming vehicle expenses.

Only include miles when vehicle was placed in service for this business.

Total business/investment miles driven in (Tax Year):

Enter the total amount of miles this vehicle was driven for this business. Do not include commuting miles, or non-business miles here.

Commuting & Other Miles in (Tax Year):

- Daily Round-trip: Enter the total commuting miles driven in one day.

- Total Commuting Miles: Enter the total commuting miles driven in year.

- Other Miles Driven: Enter here all other miles, including personal miles driven while vehicle.

Date Vehicle Placed in Service:

Enter the date this vehicle was first placed in service.

Months in Use:

Enter the number of months this vehicle was used for this business during the tax year of current return (1-12)

Parking Fees and Tolls:

Enter any business-related parking fees and tolls.

Other Actual Car and Truck Expenses:

Licenses, Registration Fees, Gas, Insurance, Repairs, Oil, Garage Rent, and Tires. These expenses must have been paid within the same tax year the tax return is for. Only vehicle expenses that were paid for while this vehicle was placed in service for this business is allowed.

Vehicle Life:

Enter the life selected for the vehicle.

Tip: Under MACRS, cars are classified as 5-year property (with exceptions).

See IRS Publication 463 for more information.

Special Depreciation Disallowance:

Check the box to not elect to claim the special depreciation allowance for the vehicle or if the vehicle is not qualified property.

Special Designations:

These two questions are for Qualified Liberty Zone Property and Electric Vehicle.

(You must answer Yes or No for the page to save).

Excess Depreciation:

Report past year excess depreciation here.

Enter the Basis in the vehicle:

Generally its cost. This includes any amount you borrow or pay in cash, other property, or services.

Elected Section 179 Depreciation Deduction:

When electing to take Section 179 Depreciation Deduction for this vehicle, enter the amount here.

• • This deduction is only available in the first year the vehicle is placed in service.

  • You can not carryover this deduction.

Note: The system will take Section 179 expense deductions before taking vehicle depreciation. The system may reduce this amount to conform to the applicable limitations.

Depreciation Deduction Method:

- None: The system will not calculate any depreciation deduction when selected.

- Straight Line: The straight line method (SL) over the chosen recovery period.

- 150% Declining Balance: The 150% declining balance method (150% DB) over the chosen recovery period.

- 200% Declining Balance: The 200% declining balance method (200% DB) over the chosen recovery period.

Depreciation Deduction:

Enter the Depreciation Deduction amount for this vehicle.

If you select Save and Continue, and a system error populates.

• • The allowed depreciation deduction amount will be displayed.

  • The amount entered can not be more than this amount. You will need to correct the amount to leave this page.

Enter the current basis for depreciation for the vehicle:

Generally, this is the basis (cost) minus previous depreciation.

Enter the estimated remaining useful life of the vehicle:

Enter here the remaining useful life before this current tax year. If this is the first year placed in service, enter the tax year.

Once the listing is complete, the Asset Manager will display your listing. You can see the method taken, and total expense.

Click "Edit this asset" to enter the listing.

Vehicle Information:

You will see the selected Ownership, and Method for expenses displayed on the top of the page.

Click the pencil to return to the following page to change a selection.

Enter the fair market value (FMV) for the vehicle:

This is the value of the vehicle on the first day of the lease term. If the lease agreement has a capitalized cost included, you will enter that amount.

Number of days leased:

Enter the number of months this vehicle was leased during the tax year of current return (1-12).

Total lease payments for the tax year:

Enter the total amount of lease payments made during the tax year of current return. Do not include lease payments made during months the vehicle was not placed in service.

Inclusion for the current tax year:

Inclusion Amounts are in Appendix A (starting on page 39).

Click the link to open: IRS Publication 463; Travel, Entertainment, Gift, and Car Expenses.

Were these lease payments included in your W-2:

Only select "Yes" if 100% of the lease payments were included in your Form W-2, box 1.