Q:

Subject: sec 179

 

We are having trouble getting an answer on a sec 179 question. Some accountants are telling us that you can only use sec 179 if your business has a profit of larger than the 179 deduction. Some are saying that all income, even if it from other than the business, can be considered. How can we find out if our business can take use sec 179 for last year if our business did not make a profit but we had income from other sources and paid more taxes than the 179 deduction we would like to take?

Thanks for your help.

I answered a similar question in this post.

I assume you're referring to an unincorporated Schedule C or F business.

In that case, other kinds of earned income, including that from W-2s and general partnership K-1s, as well as other profitable Sch. C & F  businesses on your 1040, will increase the limit on the amount of Section 179 that is deductible on your 1040 for that particular year.

This limitation calculation is done automatically by my Lacerte tax software.  I have heard that some of the other less sophisticated tax prep programs aren't able to factor in other earned income in their Sec. 179 deductions.  You should be working with a tax pro who both understands this procedure and has software than can calculate the proper deduction, accounting for all income shown on the 1040, not just from that particular business.

Good luck.

Kerry Kerstetter

 

Labels: 179

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 3/09/2006 12:37:00 PM Send this post: