How do you calculate business percentage use of car bought late in tax year?
For example, if I buy a car in December and put it in use right away it is easy to swing the percentage for the rest of the year (month of December) either way. I could use it 100% for business that month while typically I would have used it only 90% for business if I had the car for the whole year. How do you calculate the percentage in this case?
You’ve got several options when it comes to calculating depreciation in the first year that you purchase a car and use it for business. For example, under the section 179 deduction, you may qualify to deduct up to $10,000 even though you only used the car for 1 month out of 12. Check out our Car Depreciation article to learn more about your options and step by step instructions on how to calculate your Section 179 deduction.
Crystalynn Shelton, CPA
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