I have a tax question about how to claim depreciation. How does the depreciation deduction affect itemizing deductions?
When you claim depreciation, your itemized deductions should not be affected if you are either of these:
- Sole proprietor
- Farmer
This applies whether you itemize on Schedule A or claim the standard deduction.
If you’re a sole proprietor, report your depreciation deduction as a trade or business expense. Report it on your Schedule C.
If you’re a farmer, use Schedule F.
You’ll claim depreciation as an itemized deduction if both of these apply:
- You’re an employee.
- You’re claiming depreciation as an unreimbursed employee business expense.
You’ll use Schedule A to itemize. Your depreciation deduction is subject to the 2% of adjusted gross income (AGI) limit. So, use depreciation when deciding whether to itemize or claim the standard deduction.
Related Resources
Head of household is a filing status for single or unmarried taxpayers who have maintained a home for a qualifying person, such as a child or relative. This filing status provides a larger standard deduction and more generous tax rates for calculating federal income tax than the Single filing status.
Changing jobs can come with tax implications like job search and moving expense deductions. Learn more about these potential benefits at H&R Block.
If you’re itemizing deductions, the IRS generally allows you a medical expenses deduction if you have unreimbursed expenses that are more than 7.5% of your adjusted gross income for tax years 2017 or 2018. You can deduct the cost of care from several types of practitioners at various stages of care.
Learn more about the potential tax benefits of charitable holiday giving. Your holiday donations may boost your refund, depending on the organization.
