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
Changing jobs can come with tax implications like job search and moving expense deductions. Learn more about these potential benefits at H&R Block.
Learn more about the potential tax benefits of charitable holiday giving. Your holiday donations may boost your refund, depending on the organization.
Tax season is right around the corner! Consider how the withholding allowances claimed on your Form W-4 could affect your income tax refund by visiting the Tax Information Center blog.
What happens to your taxes after marriage? Learn how marriage can lead to changes in tax filing and returns at H&R Block.
