New car Sch C depreciation questions

hameshatumko

Hi,

I am reading Pub 946 and I am 1/3rd done. I bought a new car (Tesla) for my schedule C business (say used ~60% in 2023 for business) for $40k. My objective is to use the maximum total depreciation of the car over the 5 years without leaving money on the table and by taking more depreciation in the later years since my business income is expected to continue to increase for the coming 4 years.

1. I want to thus depreciate the car in straight line so when the income increases, my taxable business income reduces more in the later years than if I were to take higher depreciation now with 200%DB or 150%DB. Am I correct in the thinking?
2. How do I tell the FreeTaxUSA software to change from 200%DB or 150%DB to SL?
3. I learned in P946 that Section 179 can be taken only in the year of purchase. I want to confirm that whether I take S179 now or I don't, will the total amount depreciated of the car (assuming % use remains constant at 60% each year) over the total 5 years of depreciation will be the same. In other words, by not taking S179 now, I don't want to leave money on the table.
4. Same question as #2 but for Bonus Depreciation.
5. After 5 years of depreciation, the main expense for Internal Combustion Engine cars was often the gas. As I understand it, after depreciating for 5 years, I won't be able to switch from Actual to Standard. Right? In such a case, how do I use electricity rate for charging if I charge the car at home? The home electricity bill doesn't split by the amount spent for charging the car vs other usage of electricity at home.

Thanks,

RyanZ

In order to provide you with the best possible customer service I recommend that you contact Support from within your FreeTaxUSA account, and probably upgrade to the Pro Support.

In order to provide you with guidance, we would need to get from you information that I recommend NOT putting out in the open internet.

Another consideration that is not clearly specified in the Pub 946 is the IRC Section 280F - Limitation on depreciation for luxury automobiles.

You are correct that you are not allowed to switch from Actual Expenses to the Standard Mileage Rate. To claim a portion of your monthly home electrical bill, you might consider installing a Power Meter to measure the precise amount of power used by the car charger, and then pro-rate based on usage.