If you need to claim depreciation for an asset used in your business like a vehicle, equipment, or office furniture makes the process easy to follow. Here’s a complete step-by-step guide to help you enter depreciation accurately under Schedule C:
Steps to Enter Depreciation
1. Go to Schedule C
Once you're in your return, locate the Schedule C section (for business income). Click "BEGIN" next to Depreciation.
2. Add Your Asset
Click "Begin" next to Assets.
3. Describe the Property
Enter a brief description of the item.
Example: "2022 Toyota Corolla LE" for a vehicle.
4. Enter the Placed-in-Service Date
This is the date you started using the asset for business purposes.
5. Input the Cost of the Asset
Enter the full purchase price of the item (before tax or discounts).
6. Indicate Business Use Percentage
How much of the asset is used for business? For example, if a car is used 75% for business and 25% for personal, input 75%.
7. Click "Continue"
8. Click "Continue" Again
This confirms your entry and moves you to the next step.
9. Begin the Questions Section
Click "Begin" next to Questions.
10. Answer the Asset Questions
Check all the applicable boxes for your asset (e.g., was it listed property? Do you have evidence of its use?). Then click "Continue".
11. Final Step Click "Continue"
This saves your depreciation entry and brings you back to the main depreciation summary.
You’ll need to do this for each depreciable asset you want to enter.
Make sure to keep receipts and documentation for all your business assets in case of audit.
Need more help? Don’t forget to watch the full Walkthrough here.