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
Wondering if you need to pay state of Michigan taxes? Read here to learn who pays and how to pay, with guidance from the tax pros at H&R Block.
Advancing your career may be a tax deductible work expense. Learn more about 4 tax write offs that fall in this category with the experts at H&R Block.
Are you a wage earner in New York state? If so, listen up! Learn more about NY state tax with help from the tax pros at H&R Block.
