Vehicles

Facts

Enter the following information for a sample client:

Program Considerations

• Information entered in the Automobiles and Other Listed Property section prints on
  Form 4562, page 2, Part V.
• A Vehicle Expense Worksheet is generated when the Form field is set to any of the following:
  • Schedule C
  • Schedule E (partnership)
  • Schedule E (rental)
  • Schedule E (S corporation)
  • Schedule F / Form 4835
  • Schedule E (estate or trust)
  • Form 2106

  Additionally, the asset must also have at least one actual expense entered (other than depreciation), or the standard mileage rate must be forced. However, if the asset is coded to Form 2106, the existence of current year or prior year miles also triggers the worksheet, as well as page 2 of Form 2106.

• The program compares the standard mileage rate with the allowed expenses to determine which would be more beneficial for the taxpayer. If you want to force either the standard mileage rate or the actual expenses, make an entry in the 1=force actual expenses, 2=force standard mileage rate field.
• Screen 30, Vehicle/Emp. Bus. Expense, can be used instead of Screen 22, Depreciation, to enter vehicle information if any of the following apply:
• You always take the standard mileage rate on a vehicle each year and you do not want the program to optimize between actual expenses and standard mileage
• You are not claiming depreciation expense for the vehicle
• The information is for a leased vehicle

Note: Under no circumstances should the same vehicle be entered in both the Depreciation screen and the Vehicle/Employee Business Expense screen. If you do, the vehicles will be treated as separate, and will be double-counted on the tax return.

• The All Vehicles view in the Show Assets for list provides an easy way for you to view vehicles on an annual basis in order to enter current year mileage and actual expenses.
  

This view is dependent on the method of depreciation. When selected, assets with an automobile depreciation method of 30, 31, 43, 44, 45, 46, 55, and 56 will be displayed.

How?

To enter the vehicle:

1. Open the sample client.
2. Open the Depreciation screen.
   
3. Enter the information from the Depreciation table above in the appropriate input fields.

Tips & Shortcuts

Instructions related to this exercise and other related items can be found by clicking the Help Me button while in the Depreciation screen.

Review

You should have entered information that produced a Schedule C with vehicle expenses and a Vehicle Expense worksheet, as well as the following data on Schedule C and Form 1040:

Troubleshooting

Problem: Depreciation for the vehicle is appearing twice on page 2 of Form 4562.

Solution: You entered the vehicle information in both Screen 22, Depreciation, and
Screen 30, Vehicle/Emp. Bus. Expense.

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