Question

I have a tax question about how to claim depreciation. How does the depreciation deduction affect itemizing deductions?

Answer

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 Topics

Related Resources

I am in the process of upgrading my home with home improvement projects. Can I deduct the cost of a new roof?

Learn more about deducting the cost of a new roof with advice from the tax experts at H&R Block.

I have a question about first time home buyer taxes. Is there a first time home buyer tax credit available?

Will being a first-time homeowner affect your tax return? What deductions can you claim? Learn more from the tax experts from H&R Block.

Are there any other itemized deductions that I could claim on my tax return? I don’t want to overlook any potent

Discover what items qualify as other itemized deductions with help from the tax experts at H&R Block.

Tax Deductions for Young Adults — Plus Tax Credits & More!

As a young adult, or millennial, you might be new to the tax game. Here are tax deductions for young adults -- plus some tax credits too -- so you can...