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Daycare and Taxes All things related to Taxes and running a Daycare post here. Topics of tax exemptions, forms, filings, tax write offs, IRS etc.

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  #1  
Old 02-01-2011, 09:59 AM
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Default Question for Tom (depreciation)

We purchased a lawn mower is this deductable if so where and/or do I depreciate it? We use it both for personal and business use.
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Old 02-02-2011, 02:25 PM
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Default Lawn Mower

Yes, you can deduct a lawn mower because it's ordinary and necessary for your business. If it costs more than $100 depreciate it over 7 years after multiplying the cost by your time-space percentage. You should also take advantage of the additional 50% depreciation rule if you bought it new in 2010. This allows you to take half the depreciation in 2010 and depreciate the other half over 7 years.

See my article about this: http://www.tomcopelandblog.com/2010/...-business.html
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Old 02-02-2011, 04:50 PM
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I never thought about that but thanks, Tom. My husband just purchased a new lawn mower in 2010.
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Old 02-04-2011, 12:40 PM
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Default Question for Tom (depreciation)

T


I use Taxact to do my taxes so I put the price of the lawn mower and the date purchased in the correct place and it asked me if I wanted the 50% depr. for the first year and I said yes ...then it asked me this:


Depreciation - Section 179 Expense
Please enter the portion, if any of Lawn mower that you would like to deduct as an expense this year using the Section 179 expense election. The total amount that you may expense is limited to $500,000 for all assets and will be further limited by a threshold cost and your income.

Section 179 expense:

Do I put something here?

Then it takes me here: Do I skip this part?

Depreciation - Other Credits
If Lawn mower qualifies for any of the below credits and you plan on claiming the credit, select the appropriate box.

Investment Credit (Form 3468):

Disabled Access Credit (Form 8826):

Credit for Employer-Provided Child Care Facilities (Form 8882): Facility: Resource: N/A:

Alternative Fuel Vehicle Refueling Property Credit (Form 8911): Hydrogen Property: Other Property: N/A:
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Old 02-04-2011, 06:41 PM
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Default Lawn mower

You can only claim the Section 179 expense if you use the lawn mower more than 50% for your business. I doubt this is true, therefore say no to this.

Next, you aren't entitled to any of the other credits listed for your lawn mower. Skip this.
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Old 04-12-2011, 08:17 AM
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Default Another question about depr.

what depreciation method do I use
MACR 200% Declining Balance
MACR 150% Declining Balance
MACR Straight line
Alternative MACR 150% Declining Balance
Alternative MACR Straightline

This is for the lawnmower I will depr. for 7 years... I am using taxact online.

I have used this program for many years but the depreciation really confuses me.

Thanks
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Old 04-12-2011, 09:00 AM
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Default lawn mower

Use the MACRS 200% declining balance on the lawn mower. This is the accelerated method that will give you more deductions in the early years and less deductions in later years.
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Old 04-12-2011, 10:11 AM
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So I just did that now when it runs the alerts at the end of the program this is what is comes up an says....


Error or Omission: Depreciation Method
The straight line depreciation method is the only option available for assets that are used 50% or less for business. Please review your method selected for Lawn mower below.
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Old 04-13-2011, 02:30 PM
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Default lawn mower

This is one reason I don't like tax software. You are entitled to depreciate your lawn mower using the accelerated rules even if you use it less than 50% of the time in your business. It's only listed property (computers, printers, office equipment, etc) that you must use straight line depreciation if you use it less than 50% for your business. See if you can get around the software by manually entering in your numbers.
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Old 04-16-2011, 07:27 PM
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Is there anything wrong with using the straight line depreciation for all things even if we can accelerate depreciation? In the end will still get it all written off over the years.

Also, what happens when the lawn mower breaks two years down the road?
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Old 04-17-2011, 03:52 PM
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Default Lawn Mower

If you use the straight line depreciation method instead of the accelerated method you will still get the same deduction at the end of 7 years. If the lawn mower wears out before the end of 7 years you can deduct all remaining depreciation that has not been previously deducted.
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