File your Taxes for Free!
  • Get your maximum refund*
  • 100% accurate calculations guaranteed*

TurboTax Federal Free Edition - File Taxes Online

Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!

Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.


© 2012 - 2018 All rights reserved.

This is an Approved TurboTax Affiliate site. TurboTax and TurboTax Online, among other are registered trademarks and/or service marks of Intuit, Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
When discussing "Free e-file", note that state e-file is an additional fee. E-file fees do not apply to New York state returns. Prices are subject to change without notice. E-file and get your refund faster
*If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
*Maximum Refund Guarantee - or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/14. E-file, Audit Defense, Professional Review, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee. *We're so confident your return will be done right, we guarantee it. Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
https://turbotax.intuit.com/corp/guarantees.jsp

Self Employed Tax Filing

How To File A Free State Tax ReturnIllinois 1040xState Income Tax Form 2012Online Tax Filing 1040nrForm 1040 EzFree Tax PrepFile 2012 And 2013 TaxesPast Year Taxes2012 Free Taxes OnlineHow To File A Tax Extension 2011File Free State Tax ReturnIrs Income Tax Forms 2010How To Amend Tax Return TurbotaxHow Do I Amend My 2012 Tax ReturnHow To Ammend A Federal Tax ReturnE File A 1040x2013 Tax Form 1040ezState Tax Filing FormsInstruction Booklet For 1040xStates Without Income TaxCan I File My 2012 Taxes Online NowCan You File 1040x ElectronicallyTaxcut OnlineFree 1040x OnlineFree File 1040ezFree Federal State Tax FilingFillable State Tax FormsAmended Tax Return OnlineI Need To Amend My 2012 Tax Return2011 Federal Income Tax 1040ez10 40 EzFree 1040nrTurbotax 2009Can You File Your 2012 Taxes NowEz FormsHow To Do An Amendment Tax ReturnFile Back Taxes Online FreeHelp With 1040xHow Can I File My 2006 TaxesAmending A Tax Return 2012

Self Employed Tax Filing

Self employed tax filing Tax Changes for Businesses Table of Contents 2001 ChangesNew 5-Year Carryback Rule for Net Operating Losses (NOLs) Electronic Form 1099 Tax Incentives for New York Liberty Zone Other 2001 Changes 2002 ChangesNonaccrual-Experience Method Issuance of Qualified Zone Academy Bonds Depletion Work Opportunity Credit Expanded in New York Liberty Zone Credit For Pension Plan Startup Costs Welfare-to-Work Credit Extended Work Opportunity Credit Extended Electric and Clean-Fuel Vehicles Renewable Electricity Production Credit Later ChangesSpecial Depreciation Allowance Extension of Placed in Service Date Special Liberty Zone Depreciation Allowance for New and Used Property Depreciation of Property Used on Indian Reservations Indian Employment Credit Extended 2001 Changes New 5-Year Carryback Rule for Net Operating Losses (NOLs) If you have an NOL from a tax year ending during 2001 or 2002, you must generally carry back the entire amount of the NOL to the 5 tax years before the NOL year (the carryback period). Self employed tax filing However, you can still choose to use the previous carryback period. Self employed tax filing You also can choose not to carry back an NOL and only carry it forward. Self employed tax filing Individuals, estates, and trusts can file Form 1045, Application for Tentative Refund. Self employed tax filing Corporations can file Form 1139, Corporation Application for Tentative Refund. Self employed tax filing The instructions for these forms will be revised to reflect the new law. Self employed tax filing Electronic Form 1099 For tax years ending after March 9, 2002, most Forms 1099 can be furnished electronically if the recipient consents, according to IRS regulations, to receive it that way. Self employed tax filing Tax Incentives for New York Liberty Zone New tax benefits are provided for the parts of New York City damaged in the terrorist attacks on September 11, 2001. Self employed tax filing These benefits apply to the newly created New York Liberty Zone, which is the area located on or south of Canal Street, East Broadway (east of its intersection with Canal Street), or Grand Street (east of its intersection with East Broadway), in the Borough of Manhattan. Self employed tax filing Tax benefits for the New York Liberty Zone include the following. Self employed tax filing A special depreciation allowance equal to 30% of the adjusted basis of qualified Liberty Zone property. Self employed tax filing It is allowed for the year the property is placed in service. Self employed tax filing No alternative minimum tax depreciation adjustment for qualified Liberty Zone property. Self employed tax filing Classification of Liberty Zone leasehold improvement property as 5-year property. Self employed tax filing Authorization of the issuance of tax-exempt New York Liberty bonds to finance the acquisition, construction, reconstruction, and renovation of nonresidential real property, residential rental property, and public utility property in the Liberty Zone. Self employed tax filing An increased section 179 deduction for certain Liberty Zone property. Self employed tax filing Extension of the replacement period from 2 years to 5 years for certain property involuntarily converted as a result of the terrorist attacks on September 11, 2001, but only if substantially all of the use of the replacement property is in New York City. Self employed tax filing For more information about involuntary conversions, see Postponement of Gain in Publication 547, Casualties, Disasters, and Thefts. Self employed tax filing In addition, for 2002 and 2003, the work opportunity credit is expanded by creating a new targeted group, consisting generally of employees who work in the Liberty Zone or, in certain cases, in New York City outside the Liberty Zone. Self employed tax filing For more information, see Work Opportunity Credit Expanded in New York Liberty Zone under 2002 Changes, later. Self employed tax filing For more information about the 30% special depreciation allowance, Liberty Zone leasehold improvement property, or increased section 179 deduction, see New York Liberty Zone Benefits, in chapter 5. Self employed tax filing In addition, the tax benefits for the Liberty Zone will be covered in a new edition of Publication 954, Tax Incentives for Empowerment Zones and Other Distressed Communities, available later in 2002. Self employed tax filing Other 2001 Changes Other changes are discussed in the following chapters. Self employed tax filing Chapter 4 Car Expenses Chapter 5 Depreciation 2002 Changes Nonaccrual-Experience Method Under current law, if you perform services and use an accrual method of accounting, you do not accrue income which, based on experience, you expect to be uncollectible. Self employed tax filing Beginning in 2002, this rule only applies if you perform services in the fields of health, law, engineering, architecture, accounting, actuarial science, performing arts, and consulting, or your average annual gross receipts for the 3 prior tax years does not exceed $5,000,000. Self employed tax filing As under current law, the nonaccrual-experience method will not apply to amounts on which you charge interest or a late payment penalty. Self employed tax filing For more information, see Nonaccrual-Experience Method in chapter 11 of Publication 535, Business Expenses. Self employed tax filing Issuance of Qualified Zone Academy Bonds State and local governments issue qualified zone academy bonds to raise funds for the use of qualified zone academies. Self employed tax filing The amount of bonds that may be issued was limited to $400 million each year for 1998, 1999, 2000, and 2001. Self employed tax filing This provision has been extended to provide for an additional $400 million of bonds to be issued each year for 2002 and 2003. Self employed tax filing For more information about qualified zone academy bonds, see Publication 954, Tax Incentives for Empowerment Zones and Other Distressed Communities. Self employed tax filing Depletion The suspension of the taxable income limit on percentage depletion from the marginal production of oil and natural gas that was scheduled to expire for tax years beginning after 2001 has been extended to tax years beginning before 2004. Self employed tax filing For more information on marginal production, see section 613A(c) of the Internal Revenue Code. Self employed tax filing Work Opportunity Credit Expanded in New York Liberty Zone The work opportunity credit is expanded to include a new targeted group consisting generally of employees who perform substantially all their services: In the New York Liberty Zone (defined earlier under Tax Incentives for New York Liberty Zone, under 2001 Changes), or Elsewhere in New York City for a business that relocated from the Liberty Zone due to the destruction or damage of its place of business by the September 11, 2001, terrorist attack. Self employed tax filing The credit is available to employers for wages paid to new employees and existing employees for work performed during 2002 or 2003. Self employed tax filing Certain limits apply. Self employed tax filing For more information about the work opportunity credit, see Publication 954, Tax Incentives for Empowerment Zones and Other Distressed Communities. Self employed tax filing Credit For Pension Plan Startup Costs The credit for pension plan startup costs is now allowed for plans that become effective after December 31, 2001. Self employed tax filing Previously, the credit was only allowed for plans established after December 31, 2001. Self employed tax filing For more information on the credit, see Important Changes for 2002 in Publication 560, Retirement Plans for Small Business. Self employed tax filing Welfare-to-Work Credit Extended The welfare-to-work credit that was scheduled to expire for wages paid to individuals who began working for you after 2001 has been extended to include wages paid to qualified individuals who begin work for you in 2002 or 2003. Self employed tax filing For more information on the welfare-to-work credit, see Publication 954, Tax Incentives for Empowerment Zones and Other Distressed Communities. Self employed tax filing Work Opportunity Credit Extended The work opportunity credit that was scheduled to expire for wages paid to individuals who began working for you after 2001 has been extended to include wages paid to qualified individuals who begin work for you in 2002 or 2003. Self employed tax filing For more information about the work opportunity credit, see Publication 954, Tax Incentives for Empowerment Zones and Other Distressed Communities. Self employed tax filing Electric and Clean-Fuel Vehicles The maximum clean-fuel vehicle deduction and qualified electric vehicle credit were scheduled to be 25% lower for 2002 and both were scheduled to be phased out completely by 2005. Self employed tax filing The full deduction and credit are now allowed for qualified property placed in service in 2002 and 2003. Self employed tax filing The phaseout of the deduction and the credit will begin in 2004, and no deduction or credit will be allowed for property placed in service after 2006. Self employed tax filing For more information about electric and clean-fuel vehicles, see chapter 12 in Publication 535, Business Expenses. Self employed tax filing Renewable Electricity Production Credit The renewable electricity production credit is extended to include electricity produced by facilities placed in service after 2001 and before 2004. Self employed tax filing Later Changes Special Depreciation Allowance You can claim the special depreciation allowance (an additional 30% depreciation deduction) for new property that you acquire before September 11, 2004, and place in service for your business generally before January 1, 2005, if you meet the other requirements for qualified property covered in chapter 5. Self employed tax filing Accordingly, you will generally no longer be able to claim the special depreciation allowance for the qualified property if you acquire it after September 10, 2004, or place it in service for your business after December 31, 2004. Self employed tax filing However, you will be able to claim the special Liberty Zone depreciation allowance (an additional 30% depreciation deduction) for most qualified property if you place it in service in the Liberty Zone after December 31, 2004, and generally before January 1, 2007, provided you meet the other requirements for qualified Liberty Zone property covered in chapter 5. Self employed tax filing Extension of Placed in Service Date To qualify for the special depreciation allowance, your property must meet certain tests, including the placed in service date test, as well as the other requirements covered in chapter 5 of this publication. Self employed tax filing To meet the placed in service date test, your property must generally be placed in service for use in your trade or business or for the production of income after September 10, 2001, and before January 1, 2005. Self employed tax filing However, certain property placed in service before January 1, 2006, may meet this test. Self employed tax filing Transportation property and property with a recovery period of 10 years or longer meet the test if one of the following applies. Self employed tax filing The property has an estimated production period of more than 2 years. Self employed tax filing The property has an estimated production period of more than 1 year and it costs more than $1 million. Self employed tax filing Transportation property is any tangible personal property used in the trade or business of transporting persons or property. Self employed tax filing For property that qualifies for the special depreciation allowance solely because of the one-year extension of the placed in service date, only the part of the basis attributable to manufacture, construction, or production before September 11, 2004, is eligible for the special depreciation allowance. Self employed tax filing Special Liberty Zone Depreciation Allowance for New and Used Property You can claim the special Liberty Zone depreciation allowance (an additional 30% depreciation deduction) for used property that you acquire after September 10, 2001, if the property meets the requirements listed under Qualified Liberty Zone Property in chapter 5 of this publication. Self employed tax filing You will be able to claim the allowance for both new and used property that you acquire after September 10, 2004, provided the property meets the other requirements for qualified Liberty Zone property. Self employed tax filing Depreciation of Property Used on Indian Reservations The special depreciation rules that apply to qualified property used on an Indian reservation were scheduled to expire for property placed in service after 2003. Self employed tax filing These special rules have been extended to include property placed in service in 2004. Self employed tax filing For more information about these rules, see Publication 946, How To Depreciate Property. Self employed tax filing Indian Employment Credit Extended The Indian employment credit that was scheduled to expire for tax years beginning after 2003 has been extended to include a tax year beginning in 2004. Self employed tax filing For more information about this credit, see Publication 954, Tax Incentives for Empowerment Zones and Other Distressed Communities. Self employed tax filing Prev  Up  Next   Home   More Online Publications
Print - Click this link to Print this page

Accessible Forms & Publications

The Internal Revenue Service offers content in a variety of file formats to accommodate people who use assistive technology such as screen reading software, refreshable Braille displays, and voice recognition software. We have prepared hundreds of tax forms and publications that can be downloaded or viewed online in text-only, Braille ready files, browser-friendly HTML, accessible PDF, and large print.  

 

To download these files, use the following links:

Helpful Links

Check out the new English/ASL video on the IRS YouTube Channel and meet Lex, the Tax Time canine. Lex introduces the terrific online services available for people with disabilities. Select the video link and then select the  "Leave IRS Site" link to start the video.

We welcome your comments. Please contact us with any comments, questions, and suggestions. To leave a comment, go to our comments page.

Page Last Reviewed or Updated: 04-Sep-2013

The Self Employed Tax Filing

Self employed tax filing 7. Self employed tax filing   Depreciation, Depletion, and Amortization Table of Contents What's New for 2013 Introduction Topics - This chapter discusses: Useful Items - You may want to see: Overview of DepreciationWhat Property Can Be Depreciated? What Property Cannot Be Depreciated? When Does Depreciation Begin and End? Can You Use MACRS To Depreciate Your Property? What Is the Basis of Your Depreciable Property? How Do You Treat Repairs and Improvements? Do You Have To File Form 4562? How Do You Correct Depreciation Deductions? Section 179 Expense DeductionWhat Property Qualifies? What Property Does Not Qualify? How Much Can You Deduct? How Do You Elect the Deduction? When Must You Recapture the Deduction? Claiming the Special Depreciation AllowanceWhat is Qualified Property? How Can You Elect Not To Claim the Allowance? When Must You Recapture an Allowance Figuring Depreciation Under MACRSWhich Depreciation System (GDS or ADS) Applies? Which Property Class Applies Under GDS? What Is the Placed-in-Service Date? What Is the Basis for Depreciation? Which Recovery Period Applies? Which Convention Applies? Which Depreciation Method Applies? How Is the Depreciation Deduction Figured? How Do You Use General Asset Accounts? When Do You Recapture MACRS Depreciation? Additional Rules for Listed PropertyWhat Is Listed Property? What Is the Business-Use Requirement? Do the Passenger Automobile Limits Apply? Depletion Who Can Claim Depletion? Figuring Depletion AmortizationBusiness Start-Up Costs Reforestation Costs Section 197 Intangibles What's New for 2013 Increased section 179 expense deduction dollar limits. Self employed tax filing  The maximum amount you can elect to deduct for most section 179 property you placed in service in 2013 is $500,000. Self employed tax filing This limit is reduced by the amount by which the cost of the property placed in service during the tax year exceeds $2 million. Self employed tax filing See Dollar Limits under Section 179 Expense Deduction , later. Self employed tax filing Extension of special depreciation allowance for certain qualified property acquired after December 31, 2007. Self employed tax filing . Self employed tax filing  You may be able to take a 50% special depreciation allowance for certain qualified property acquired after December 31, 2007, and placed in service before January 1, 2014. Self employed tax filing See Claiming the Special Depreciation Allowance , later. Self employed tax filing Expiration of the 3- year recovery period for certain race horses. Self employed tax filing  The 3-year recovery period for race horses two years old or younger will expire for such horses placed in service after December 31, 2013. Self employed tax filing Introduction If you buy or make improvements to farm property such as machinery, equipment, livestock, or a structure with a useful life of more than a year, you generally cannot deduct its entire cost in one year. Self employed tax filing Instead, you must spread the cost over the time you use the property and deduct part of it each year. Self employed tax filing For most types of property, this is called depreciation. Self employed tax filing This chapter gives information on depreciation methods that generally apply to property placed in service after 1986. Self employed tax filing For information on depreciating pre-1987 property, see Publication 534, Depreciating Property Placed in Service Before 1987. Self employed tax filing Topics - This chapter discusses: Overview of depreciation Section 179 expense deduction Special depreciation allowance Modified Accelerated Cost Recovery System (MACRS) Listed property Basic information on cost depletion (including timber depletion) and percentage depletion Amortization of the costs of going into business, reforestation costs, the costs of pollution control facilities, and the costs of section 197 intangibles Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 534 Depreciating Property Placed in Service Before 1987 535 Business Expenses 544 Sales and Other Dispositions of Assets 551 Basis of Assets 946 How To Depreciate Property Form (and Instructions) T (Timber), Forest Activities Schedule 3115 Application for Change in Accounting Method 4562 Depreciation and Amortization 4797 Sales of Business Property See chapter 16 for information about getting publications and forms. Self employed tax filing It is important to keep good records for property you depreciate. Self employed tax filing Do not file these records with your return. Self employed tax filing Instead, you should keep them as part of the permanent records of the depreciated property. Self employed tax filing They will help you verify the accuracy of the depreciation of assets placed in service in the current and previous tax years. Self employed tax filing For general information on recordkeeping, see Publication 583, Starting a Business and Keeping Records. Self employed tax filing For specific information on keeping records for section 179 property and listed property, see Publication 946, How To Depreciate Property. Self employed tax filing Overview of Depreciation This overview discusses basic information on the following. Self employed tax filing What property can be depreciated. Self employed tax filing What property cannot be depreciated. Self employed tax filing When depreciation begins and ends. Self employed tax filing Whether MACRS can be used to figure depreciation. Self employed tax filing What is the basis of your depreciable property. Self employed tax filing How to treat repairs and improvements. Self employed tax filing When you must file Form 4562. Self employed tax filing How you can correct depreciation claimed incorrectly. Self employed tax filing What Property Can Be Depreciated? You can depreciate most types of tangible property (except land), such as buildings, machinery, equipment, vehicles, certain livestock, and furniture. Self employed tax filing You can also depreciate certain intangible property, such as copyrights, patents, and computer software. Self employed tax filing To be depreciable, the property must meet all the following requirements. Self employed tax filing It must be property you own. Self employed tax filing It must be used in your business or income-producing activity. Self employed tax filing It must have a determinable useful life. Self employed tax filing It must have a useful life that extends substantially beyond the year you place it in service. Self employed tax filing Property You Own To claim depreciation, you usually must be the owner of the property. Self employed tax filing You are considered as owning property even if it is subject to a debt. Self employed tax filing Leased property. Self employed tax filing   You can depreciate leased property only if you retain the incidents of ownership in the property. Self employed tax filing This means you bear the burden of exhaustion of the capital investment in the property. Self employed tax filing Therefore, if you lease property from someone to use in your trade or business or for the production of income, you generally cannot depreciate its cost because you do not retain the incidents of ownership. Self employed tax filing You can, however, depreciate any capital improvements you make to the leased property. Self employed tax filing See Additions and Improvements under Which Recovery Period Applies in chapter 4 of Publication 946. Self employed tax filing   If you lease property to someone, you generally can depreciate its cost even if the lessee (the person leasing from you) has agreed to preserve, replace, renew, and maintain the property. Self employed tax filing However, you cannot depreciate the cost of the property if the lease provides that the lessee is to maintain the property and return to you the same property or its equivalent in value at the expiration of the lease in as good condition and value as when leased. Self employed tax filing Life tenant. Self employed tax filing   Generally, if you hold business or investment property as a life tenant, you can depreciate it as if you were the absolute owner of the property. Self employed tax filing See Certain term interests in property , later, for an exception. Self employed tax filing Property Used in Your Business or Income-Producing Activity To claim depreciation on property, you must use it in your business or income-producing activity. Self employed tax filing If you use property to produce income (investment use), the income must be taxable. Self employed tax filing You cannot depreciate property that you use solely for personal activities. Self employed tax filing However, if you use property for business or investment purposes and for personal purposes, you can deduct depreciation based only on the percentage of business or investment use. Self employed tax filing Example 1. Self employed tax filing   If you use your car for farm business, you can deduct depreciation based on its percentage of use in farming. Self employed tax filing If you also use it for investment purposes, you can depreciate it based on its percentage of investment use. Self employed tax filing Example 2. Self employed tax filing   If you use part of your home for business, you may be able to deduct depreciation on that part based on its business use. Self employed tax filing For more information, see Business Use of Your Home in chapter 4. Self employed tax filing Inventory. Self employed tax filing   You can never depreciate inventory because it is not held for use in your business. Self employed tax filing Inventory is any property you hold primarily for sale to customers in the ordinary course of your business. Self employed tax filing Livestock. Self employed tax filing   Livestock purchased for draft, breeding, or dairy purposes can be depreciated only if they are not kept in an inventory account. Self employed tax filing Livestock you raise usually has no depreciable basis because the costs of raising them are deducted and not added to their basis. Self employed tax filing However, see Immature livestock under When Does Depreciation Begin and End , later, for a special rule. Self employed tax filing Property Having a Determinable Useful Life To be depreciable, your property must have a determinable useful life. Self employed tax filing This means it must be something that wears out, decays, gets used up, becomes obsolete, or loses its value from natural causes. Self employed tax filing Irrigation systems and water wells. Self employed tax filing   Irrigation systems and wells used in a trade or business can be depreciated if their useful life can be determined. Self employed tax filing You can depreciate irrigation systems and wells composed of masonry, concrete, tile, metal, or wood. Self employed tax filing In addition, you can depreciate costs for moving dirt to construct irrigation systems and water wells composed of these materials. Self employed tax filing However, land preparation costs for center pivot irrigation systems are not depreciable. Self employed tax filing Dams, ponds, and terraces. Self employed tax filing   In general, you cannot depreciate earthen dams, ponds, and terraces unless the structures have a determinable useful life. Self employed tax filing What Property Cannot Be Depreciated? Certain property cannot be depreciated, even if the requirements explained earlier are met. Self employed tax filing This includes the following. Self employed tax filing Land. Self employed tax filing You can never depreciate the cost of land because land does not wear out, become obsolete, or get used up. Self employed tax filing The cost of land generally includes the cost of clearing, grading, planting, and landscaping. Self employed tax filing Although you cannot depreciate land, you can depreciate certain costs incurred in preparing land for business use. Self employed tax filing See chapter 1 of Publication 946. Self employed tax filing Property placed in service and disposed of in the same year. Self employed tax filing Determining when property is placed in service is explained later. Self employed tax filing Equipment used to build capital improvements. Self employed tax filing You must add otherwise allowable depreciation on the equipment during the period of construction to the basis of your improvements. Self employed tax filing Intangible property such as section 197 intangibles. Self employed tax filing This property does not have a determinable useful life and generally cannot be depreciated. Self employed tax filing However, see Amortization , later. Self employed tax filing Special rules apply to computer software (discussed below). Self employed tax filing Certain term interests (discussed below). Self employed tax filing Computer software. Self employed tax filing   Computer software is generally not a section 197 intangible even if acquired in connection with the acquisition of a business, if it meets all of the following tests. Self employed tax filing It is readily available for purchase by the general public. Self employed tax filing It is subject to a nonexclusive license. Self employed tax filing It has not been substantially modified. Self employed tax filing   If the software meets the tests above, it can be depreciated and may qualify for the section 179 expense deduction and the special depreciation allowance (if applicable), discussed later. Self employed tax filing Certain term interests in property. Self employed tax filing   You cannot depreciate a term interest in property created or acquired after July 27, 1989, for any period during which the remainder interest is held, directly or indirectly, by a person related to you. Self employed tax filing This rule does not apply to the holder of a term interest in property acquired by gift, bequest, or inheritance. Self employed tax filing For more information, see chapter 1 of Publication 946. Self employed tax filing When Does Depreciation Begin and End? You begin to depreciate your property when you place it in service for use in your trade or business or for the production of income. Self employed tax filing You stop depreciating property either when you have fully recovered your cost or other basis or when you retire it from service, whichever happens first. Self employed tax filing Placed in Service Property is placed in service when it is ready and available for a specific use, whether in a business activity, an income-producing activity, a tax-exempt activity, or a personal activity. Self employed tax filing Even if you are not using the property, it is in service when it is ready and available for its specific use. Self employed tax filing Example. Self employed tax filing You bought a planter for use in your farm business. Self employed tax filing The planter was delivered in December 2012 after harvest was over. Self employed tax filing You begin to depreciate the planter for 2012 because it was ready and available for its specific use in 2012, even though it will not be used until the spring of 2013. Self employed tax filing If your planter comes unassembled in December 2012 and is put together in February 2013, it is not placed in service until 2013. Self employed tax filing You begin to depreciate it in 2013. Self employed tax filing If your planter was delivered and assembled in February 2013 but not used until April 2013, it is placed in service in February 2013, because this is when the planter was ready for its specified use. Self employed tax filing You begin to depreciate it in 2013. Self employed tax filing Fruit or nut trees and vines. Self employed tax filing   If you acquire an orchard, grove, or vineyard before the trees or vines have reached the income-producing stage, and they have a preproductive period of more than 2 years, you must capitalize the preproductive-period costs under the uniform capitalization rules (unless you elect not to use these rules). Self employed tax filing See chapter 6 for information about the uniform capitalization rules. Self employed tax filing Your depreciation begins when the trees and vines reach the income-producing stage (that is, when they bear fruit, nuts, or grapes in quantities sufficient to commercially warrant harvesting). Self employed tax filing Immature livestock. Self employed tax filing   Depreciation for livestock begins when the livestock reaches the age of maturity. Self employed tax filing If you bought immature livestock for drafting purposes, depreciation begins when they can be worked. Self employed tax filing If you bought immature livestock for dairy purposes, depreciation begins when they can be milked. Self employed tax filing If you bought immature livestock for breeding purposes, depreciation begins when they can be bred. Self employed tax filing Your basis for depreciation is your initial cost for the immature livestock. Self employed tax filing Idle Property Continue to claim a deduction for depreciation on property used in your business or for the production of income even if it is temporarily idle. Self employed tax filing For example, if you stop using a machine because there is a temporary lack of a market for a product made with that machine, continue to deduct depreciation on the machine. Self employed tax filing Cost or Other Basis Fully Recovered You stop depreciating property when you have fully recovered your cost or other basis. Self employed tax filing This happens when your section 179 and allowed or allowable depreciation deductions equal your cost or investment in the property. Self employed tax filing Retired From Service You stop depreciating property when you retire it from service, even if you have not fully recovered its cost or other basis. Self employed tax filing You retire property from service when you permanently withdraw it from use in a trade or business or from use in the production of income because of any of the following events. Self employed tax filing You sell or exchange the property. Self employed tax filing You convert the property to personal use. Self employed tax filing You abandon the property. Self employed tax filing You transfer the property to a supplies or scrap account. Self employed tax filing The property is destroyed. Self employed tax filing For information on abandonment of property, see chapter 8. Self employed tax filing For information on destroyed property, see chapter 11 and Publication 547, Casualties, Disasters, and Thefts. Self employed tax filing Can You Use MACRS To Depreciate Your Property? You must use the Modified Accelerated Cost Recovery System (MACRS) to depreciate most business and investment property placed in service after 1986. Self employed tax filing MACRS is explained later under Figuring Depreciation Under MACRS . Self employed tax filing You cannot use MACRS to depreciate the following property. Self employed tax filing Property you placed in service before 1987. Self employed tax filing Use the methods discussed in Publication 534. Self employed tax filing Certain property owned or used in 1986. Self employed tax filing See chapter 1 of Publication 946. Self employed tax filing Intangible property. Self employed tax filing Films, video tapes, and recordings. Self employed tax filing Certain corporate or partnership property acquired in a nontaxable transfer. Self employed tax filing Property you elected to exclude from MACRS. Self employed tax filing For more information, see chapter 1 of Publication 946. Self employed tax filing What Is the Basis of Your Depreciable Property? To figure your depreciation deduction, you must determine the basis of your property. Self employed tax filing To determine basis, you need to know the cost or other basis of your property. Self employed tax filing Cost or other basis. Self employed tax filing   The basis of property you buy is usually its cost plus amounts you paid for items such as sales tax, freight charges, and installation and testing fees. Self employed tax filing The cost includes the amount you pay in cash, debt obligations, other property, or services. Self employed tax filing   There are times when you cannot use cost as basis. Self employed tax filing In these situations, the fair market value (FMV) or the adjusted basis of the property may be used. Self employed tax filing Adjusted basis. Self employed tax filing   To find your property's basis for depreciation, you may have to make certain adjustments (increases and decreases) to the basis of the property for events occurring between the time you acquired the property and the time you placed it in service. Self employed tax filing Basis adjustment for depreciation allowed or allowable. Self employed tax filing   After you place your property in service, you must reduce the basis of the property by the depreciation allowed or allowable, whichever is greater. Self employed tax filing Depreciation allowed is depreciation you actually deducted (from which you received a tax benefit). Self employed tax filing Depreciation allowable is depreciation you are entitled to deduct. Self employed tax filing   If you do not claim depreciation you are entitled to deduct, you must still reduce the basis of the property by the full amount of depreciation allowable. Self employed tax filing   If you deduct more depreciation than you should, you must reduce your basis by any amount deducted from which you received a tax benefit (the depreciation allowed). Self employed tax filing   For more information, see chapter 6. Self employed tax filing How Do You Treat Repairs and Improvements? You generally deduct the cost of repairing business property in the same way as any other business expense. Self employed tax filing However, if a repair or replacement increases the value of your property, makes it more useful, or lengthens its life, you must treat it as an improvement and depreciate it. Self employed tax filing Treat improvements as separate depreciable property. Self employed tax filing See chapter 1 of Publication 946 for more information. Self employed tax filing Example. Self employed tax filing You repair a small section on a corner of the roof of a barn that you rent to others. Self employed tax filing You deduct the cost of the repair as a business expense. Self employed tax filing However, if you replace the entire roof, the new roof is considered to be an improvement because it increases the value and lengthens the life for the property. Self employed tax filing You depreciate the cost of the new roof. Self employed tax filing Improvements to rented property. Self employed tax filing   You can depreciate permanent improvements you make to business property you rent from someone else. Self employed tax filing Do You Have To File Form 4562? Use Form 4562 to claim your deduction for depreciation and amortization. Self employed tax filing You must complete and attach Form 4562 to your tax return if you are claiming any of the following. Self employed tax filing A section 179 expense deduction for the current year or a section 179 carryover from a prior year. Self employed tax filing Depreciation for property placed in service during the current year. Self employed tax filing Depreciation on any vehicle or other listed property, regardless of when it was placed in service. Self employed tax filing Amortization of costs that began in the current year. Self employed tax filing For more information, see the Instructions for Form 4562. Self employed tax filing How Do You Correct Depreciation Deductions? If you deducted an incorrect amount of depreciation in any year, you may be able to make a correction by filing an amended return for that year. Self employed tax filing You can file an amended return to correct the amount of depreciation claimed for any property in any of the following situations. Self employed tax filing You claimed the incorrect amount because of a mathematical error made in any year. Self employed tax filing You claimed the incorrect amount because of a posting error made in any year, for example, omitting an asset from the depreciation schedule. Self employed tax filing You have not adopted a method of accounting for the property placed in service by you in tax years ending after December 29, 2003. Self employed tax filing You claimed the incorrect amount on property placed in service by you in tax years ending before December 30, 2003. Self employed tax filing Note. Self employed tax filing You have adopted a method of accounting if you used the same incorrect method of depreciation for two or more consecutively filed returns. Self employed tax filing If you are not allowed to make the correction on an amended return, you may be able to change your accounting method to claim the correct amount of depreciation. Self employed tax filing See the Instructions for Form 3115. Self employed tax filing Section 179 Expense Deduction You can elect to recover all or part of the cost of certain qualifying property, up to a limit, by deducting it in the year you place the property in service. Self employed tax filing This is the section 179 expense deduction. Self employed tax filing You can elect the section 179 expense deduction instead of recovering the cost by taking depreciation deductions. Self employed tax filing This part of the chapter explains the rules for the section 179 expense deduction. Self employed tax filing It explains what property qualifies for the deduction, what property does not qualify for the deduction, the limits that may apply, how to elect the deduction, and when you may have to recapture the deduction. Self employed tax filing For more information, see chapter 2 of Publication 946. Self employed tax filing What Property Qualifies? To qualify for the section 179 expense deduction, your property must meet all the following requirements. Self employed tax filing It must be eligible property. Self employed tax filing It must be acquired for business use. Self employed tax filing It must have been acquired by purchase. Self employed tax filing Eligible Property To qualify for the section 179 expense deduction, your property must be one of the following types of depreciable property. Self employed tax filing Tangible personal property. Self employed tax filing Qualified real property. Self employed tax filing (Special rules apply to qualified real property that you elect to treat as qualified section 179 real property. Self employed tax filing For more information, see chapter 2 of Publication 946 and section 179(f) of the Internal Revenue Code. Self employed tax filing ) Other tangible property (except buildings and their structural components) used as: An integral part of manufacturing, production, or extraction or of furnishing transportation, communications, electricity, gas, water, or sewage disposal services; A research facility used in connection with any of the activities in (a) above; or A facility used in connection with any of the activities in (a) for the bulk storage of fungible commodities. Self employed tax filing Single purpose agricultural (livestock) or horticultural structures. Self employed tax filing Storage facilities (except buildings and their structural components) used in connection with distributing petroleum or any primary product of petroleum. Self employed tax filing Off-the-shelf computer software that is readily available for purchase by the general public, is subject to a nonexclusive lease, and has not been substantially modified. Self employed tax filing Tangible personal property. Self employed tax filing   Tangible personal property is any tangible property that is not real property. Self employed tax filing It includes the following property. Self employed tax filing Machinery and equipment. Self employed tax filing Property contained in or attached to a building (other than structural components), such as milk tanks, automatic feeders, barn cleaners, and office equipment. Self employed tax filing Gasoline storage tanks and pumps at retail service stations. Self employed tax filing Livestock, including horses, cattle, hogs, sheep, goats, and mink and other fur-bearing animals. Self employed tax filing Facility used for the bulk storage of fungible commodities. Self employed tax filing   A facility used for the bulk storage of fungible commodities is qualifying property for purposes of the section 179 expense deduction if it is used in connection with any of the activities listed earlier in item (3)(a). Self employed tax filing Bulk storage means the storage of a commodity in a large mass before it is used. Self employed tax filing Grain bins. Self employed tax filing   A grain bin is an example of a storage facility that is qualifying section 179 property. Self employed tax filing It is a facility used in connection with the production of grain or livestock for the bulk storage of fungible commodities. Self employed tax filing Single purpose agricultural or horticultural structures. Self employed tax filing   A single purpose agricultural (livestock) or horticultural structure is qualifying property for purposes of the section 179 expense deduction. Self employed tax filing Agricultural structure. Self employed tax filing   A single purpose agricultural (livestock) structure is any building or enclosure specifically designed, constructed, and used for both the following reasons. Self employed tax filing To house, raise, and feed a particular type of livestock and its produce. Self employed tax filing To house the equipment, including any replacements, needed to house, raise, or feed the livestock. Self employed tax filing For this purpose, livestock includes poultry. Self employed tax filing   Single purpose structures are qualifying property if used, for example, to breed chickens or hogs, produce milk from dairy cattle, or produce feeder cattle or pigs, broiler chickens, or eggs. Self employed tax filing The facility must include, as an integral part of the structure or enclosure, equipment necessary to house, raise, and feed the livestock. Self employed tax filing Horticultural structure. Self employed tax filing   A single purpose horticultural structure is either of the following. Self employed tax filing A greenhouse specifically designed, constructed, and used for the commercial production of plants. Self employed tax filing A structure specifically designed, constructed, and used for the commercial production of mushrooms. Self employed tax filing Use of structure. Self employed tax filing   A structure must be used only for the purpose that qualified it. Self employed tax filing For example, a hog barn will not be qualifying property if you use it to house poultry. Self employed tax filing Similarly, using part of your greenhouse to sell plants will make the greenhouse nonqualifying property. Self employed tax filing   If a structure includes work space, the work space can be used only for the following activities. Self employed tax filing Stocking, caring for, or collecting livestock or plants or their produce. Self employed tax filing Maintaining the enclosure or structure. Self employed tax filing Maintaining or replacing the equipment or stock enclosed or housed in the structure. Self employed tax filing Property Acquired by Purchase To qualify for the section 179 expense deduction, your property must have been acquired by purchase. Self employed tax filing For example, property acquired by gift or inheritance does not qualify. Self employed tax filing Property acquired from a related person (that is, your spouse, ancestors, or lineal descendants) is not considered acquired by purchase. Self employed tax filing Example. Self employed tax filing Ken is a farmer. Self employed tax filing He purchased two tractors, one from his brother and one from his father. Self employed tax filing He placed both tractors in service in the same year he bought them. Self employed tax filing The tractor purchased from his father does not qualify for the section 179 expense deduction because he is a related person (as defined above). Self employed tax filing The tractor purchased from his brother does qualify for the deduction because Ken is not a related person (as defined above). Self employed tax filing What Property Does Not Qualify? Land and improvements. Self employed tax filing   Land and land improvements, do not qualify as section 179 property. Self employed tax filing Land improvements include nonagricultural fences, swimming pools, paved parking areas, wharves, docks, bridges, and fences. Self employed tax filing However, agricultural fences do qualify as section 179 property. Self employed tax filing Similarly, field drainage tile also qualifies as section 179 property. Self employed tax filing Excepted property. Self employed tax filing   Even if the requirements explained in the preceding discussions are met, farmers cannot elect the section 179 expense deduction for the following property. Self employed tax filing Certain property you lease to others (if you are a noncorporate lessor). Self employed tax filing Certain property used predominantly to furnish lodging or in connection with the furnishing of lodging. Self employed tax filing Property used by a tax-exempt organization (other than a tax-exempt farmers' cooperative) unless the property is used mainly in a taxable unrelated trade or business. Self employed tax filing Property used by governmental units or foreign persons or entities (except property used under a lease with a term of less than 6 months). Self employed tax filing How Much Can You Deduct? Your section 179 expense deduction is generally the cost of the qualifying property. Self employed tax filing However, the total amount you can elect to deduct under section 179 is subject to a dollar limit and a business income limit. Self employed tax filing These limits apply to each taxpayer, not to each business. Self employed tax filing However, see Married individuals under Dollar Limits , later. Self employed tax filing See also the special rules for applying the limits for partnerships and S corporations under Partnerships and S Corporations , later. Self employed tax filing If you deduct only part of the cost of qualifying property as a section 179 expense deduction, you can generally depreciate the cost you do not deduct. Self employed tax filing Use Part I of Form 4562 to figure your section 179 expense deduction. Self employed tax filing Partial business use. Self employed tax filing   When you use property for business and nonbusiness purposes, you can elect the section 179 expense deduction only if you use it more than 50% for business in the year you place it in service. Self employed tax filing If you used the property more than 50% for business, multiply the cost of the property by the percentage of business use. Self employed tax filing Use the resulting business cost to figure your section 179 expense deduction. Self employed tax filing Trade-in of other property. Self employed tax filing   If you buy qualifying property with cash and a trade-in, its cost for purposes of the section 179 expense deduction includes only the cash you paid. Self employed tax filing For example, if you buy (for cash and a trade-in) a new tractor for use in your business, your cost for the section 179 expense deduction is the cash you paid. Self employed tax filing It does not include the adjusted basis of the old tractor you trade for the new tractor. Self employed tax filing Example. Self employed tax filing J-Bar Farms traded two cultivators having a total adjusted basis of $6,800 for a new cultivator costing $13,200. Self employed tax filing They received an $8,000 trade-in allowance for the old cultivators and paid $5,200 cash for the new cultivator. Self employed tax filing J-Bar also traded a used pickup truck with an adjusted basis of $8,000 for a new pickup truck costing $35,000. Self employed tax filing They received a $5,000 trade-in allowance and paid $30,000 cash for the new pickup truck. Self employed tax filing Only the cash paid by J-Bar qualifies for the section 179 expense deduction. Self employed tax filing J-Bar's business costs that qualify for a section 179 expense deduction are $35,200 ($5,200 + $30,000). Self employed tax filing Dollar Limits The total amount you can elect to deduct under section 179 for most property placed in service in 2013 is $500,000. Self employed tax filing If you acquire and place in service more than one item of qualifying property during the year, you can allocate the section 179 expense deduction among the items in any way, as long as the total deduction is not more than $500,000. Self employed tax filing Qualified real property that you elect to treat as section 179 property is limited to $250,000 of the maximum section 179 deduction of $500,000 for 2013. Self employed tax filing You do not have to claim the full $500,000. Self employed tax filing For specific information on the section 179 dollar limits, see chapter 2 of Publication 946. Self employed tax filing Reduced dollar limit for cost exceeding $2 million. Self employed tax filing   If the cost of your qualifying section 179 property placed in service in 2013 is over $2 million, you must reduce the dollar limit (but not below zero) by the amount of cost over $2 million. Self employed tax filing If the cost of your section 179 property placed in service during 2013 is $2,500,000 or more, you cannot take a section 179 expense deduction and you cannot carry over the cost that is more than $2,500,000. Self employed tax filing Example. Self employed tax filing This year, James Smith placed in service machinery costing $2,050,000. Self employed tax filing Because this cost is $50,000 more than $2 million, he must reduce his dollar limit to $450,000 ($500,000 − $50,000). Self employed tax filing Limits for sport utility vehicles. Self employed tax filing   The total amount you can elect to deduct for certain sport utility vehicles and certain other vehicles placed in service in 2013 is $25,000. Self employed tax filing This rule applies to any 4-wheeled vehicle primarily designed or used to carry passengers over public streets, roads, and highways that is rated at more than 6,000 pounds gross vehicle weight and not more than 14,000 pounds gross vehicle weight. Self employed tax filing   For more information, see chapter 2 of Publication 946. Self employed tax filing Limits for passenger automobiles. Self employed tax filing   For a passenger automobile that is placed in service in 2013, the total section 179 and depreciation deduction is limited. Self employed tax filing See Do the Passenger Automobile Limits Apply , later. Self employed tax filing Married individuals. Self employed tax filing   If you are married, how you figure your section 179 expense deduction depends on whether you file jointly or separately. Self employed tax filing If you file a joint return, you and your spouse are treated as one taxpayer in determining any reduction to the dollar limit, regardless of which of you purchased the property or placed it in service. Self employed tax filing If you and your spouse file separate returns, you are treated as one taxpayer for the dollar limit, including the reduction for costs over $2 million. Self employed tax filing You must allocate the dollar limit (after any reduction) equally between you, unless you both elect a different allocation. Self employed tax filing If the percentages elected by each of you do not total 100%, 50% will be allocated to each of you. Self employed tax filing Joint return after separate returns. Self employed tax filing   If you and your spouse elect to amend your separate returns by filing a joint return after the due date for filing your return, the dollar limit on the joint return is the lesser of the following amounts. Self employed tax filing The dollar limit (after reduction for any cost of section 179 property over $2 million). Self employed tax filing The total cost of section 179 property you and your spouse elected to expense on your separate returns. Self employed tax filing Business Income Limit The total cost you can deduct each year after you apply the dollar limit is limited to the taxable income from the active conduct of any trade or business during the year. Self employed tax filing Generally, you are considered to actively conduct a trade or business if you meaningfully participate in the management or operations of the trade or business. Self employed tax filing Any cost not deductible in one year under section 179 because of this limit can be carried to the next year. Self employed tax filing See Carryover of disallowed deduction , later. Self employed tax filing Taxable income. Self employed tax filing   In general, figure taxable income for this purpose by totaling the net income and losses from all trades and businesses you actively conducted during the year. Self employed tax filing In addition to net income or loss from a sole proprietorship, partnership, or S corporation, net income or loss derived from a trade or business also includes the following items. Self employed tax filing Section 1231 gains (or losses) as discussed in chapter 9. Self employed tax filing Interest from working capital of your trade or business. Self employed tax filing Wages, salaries, tips, or other pay earned by you (or your spouse if you file a joint return) as an employee of any employer. Self employed tax filing   In addition, figure taxable income without regard to any of the following. Self employed tax filing The section 179 expense deduction. Self employed tax filing The self-employment tax deduction. Self employed tax filing Any net operating loss carryback or carryforward. Self employed tax filing Any unreimbursed employee business expenses. Self employed tax filing Two different taxable income limits. Self employed tax filing   In addition to the business income limit for your section 179 expense deduction, you may have a taxable income limit for some other deduction (for example, charitable contributions). Self employed tax filing You may have to figure the limit for this other deduction taking into account the section 179 expense deduction. Self employed tax filing If so, complete the following steps. Self employed tax filing Step Action 1 Figure taxable income without the section 179 expense deduction or the other deduction. Self employed tax filing 2 Figure a hypothetical section 179 expense deduction using the taxable income figured in Step 1. Self employed tax filing 3 Subtract the hypothetical section 179 expense deduction figured in Step 2 from the taxable income figured in Step 1. Self employed tax filing 4 Figure a hypothetical amount for the other deduction using the amount figured in Step 3 as taxable income. Self employed tax filing 5 Subtract the hypothetical other deduction figured in Step 4 from the taxable income figured in  Step 1. Self employed tax filing 6 Figure your actual section 179 expense deduction using the taxable income figured in Step 5. Self employed tax filing 7 Subtract your actual section 179 expense deduction figured in Step 6 from the taxable income figured in Step 1. Self employed tax filing 8 Figure your actual other deduction using the taxable income figured in Step 7. Self employed tax filing Example. Self employed tax filing On February 1, 2013, the XYZ farm corporation purchased and placed in service qualifying section 179 property that cost $500,000. Self employed tax filing It elects to expense the entire $500,000 cost under section 179. Self employed tax filing In June, the corporation gave a charitable contribution of $10,000. Self employed tax filing A corporation's limit on charitable contributions is figured after subtracting any section 179 expense deduction. Self employed tax filing The business income limit for the section 179 expense deduction is figured after subtracting any allowable charitable contributions. Self employed tax filing XYZ's taxable income figured without the section 179 expense deduction or the deduction for charitable contributions is $520,000. Self employed tax filing XYZ figures its section 179 expense deduction and its deduction for charitable contributions as follows. Self employed tax filing Step 1. Self employed tax filing Taxable income figured without either deduction is $520,000. Self employed tax filing Step 2. Self employed tax filing Using $520,000 as taxable income, XYZ's hypothetical section 179 expense deduction is $500,000. Self employed tax filing Step 3. Self employed tax filing $20,000 ($520,000 − $500,000). Self employed tax filing Step 4. Self employed tax filing Using $20,000 (from Step 3) as taxable income, XYZ's hypothetical charitable contribution (limited to 10% of taxable income) is $2,000. Self employed tax filing Step 5. Self employed tax filing $518,000 ($520,000 − $2,000). Self employed tax filing Step 6. Self employed tax filing Using $518,000 (from Step 5) as taxable income, XYZ figures the actual section 179 expense deduction. Self employed tax filing Because the taxable income is at least $500,000, XYZ can take a $500,000 section 179 expense deduction. Self employed tax filing Step 7. Self employed tax filing $20,000 ($520,000 − $500,000). Self employed tax filing Step 8. Self employed tax filing Using $20,000 (from Step 7) as taxable income, XYZ's actual charitable contribution (limited to 10% of taxable income) is $2,000. Self employed tax filing Carryover of disallowed deduction. Self employed tax filing   You can carry over for an unlimited number of years the cost of any section 179 property you elected to expense but were unable to because of the business income limit. Self employed tax filing   The amount you carry over is used in determining your section 179 expense deduction in the next year. Self employed tax filing However, it is subject to the limits in that year. Self employed tax filing If you place more than one property in service in a year, you can select the properties for which all or a part of the cost will be carried forward. Self employed tax filing Your selections must be shown in your books and records. Self employed tax filing Example. Self employed tax filing Last year, Joyce Jones placed in service a machine that cost $8,000 and elected to deduct all $8,000 under section 179. Self employed tax filing The taxable income from her business (determined without regard to both a section 179 expense deduction for the cost of the machine and the self-employment tax deduction) was $6,000. Self employed tax filing Her section 179 expense deduction was limited to $6,000. Self employed tax filing The $2,000 cost that was not allowed as a section 179 expense deduction (because of the business income limit) is carried to this year. Self employed tax filing This year, Joyce placed another machine in service that cost $9,000. Self employed tax filing Her taxable income from business (determined without regard to both a section 179 expense deduction for the cost of the machine and the self-employment tax deduction) is $10,000. Self employed tax filing Joyce can deduct the full cost of the machine ($9,000) but only $1,000 of the carryover from last year because of the business income limit. Self employed tax filing She can carry over the balance of $1,000 to next year. Self employed tax filing Partnerships and S Corporations The section 179 expense deduction limits apply both to the partnership or S corporation and to each partner or shareholder. Self employed tax filing The partnership or S corporation determines its section 179 expense deduction subject to the limits. Self employed tax filing It then allocates the deduction among its partners or shareholders. Self employed tax filing If you are a partner in a partnership or shareholder of an S corporation, you add the amount allocated from the partnership or S corporation to any section 179 costs not related to the partnership or S corporation and then apply the dollar limit to this total. Self employed tax filing To determine any reduction in the dollar limit for costs over $560,000, you do not include any of the cost of section 179 property placed in service by the partnership or S corporation. Self employed tax filing After you apply the dollar limit, you apply the business income limit to any remaining section 179 costs. Self employed tax filing For more information, see chapter 2 of Publication 946. Self employed tax filing Example. Self employed tax filing In 2013, Partnership P placed in service section 179 property with a total cost of $2,160,000. Self employed tax filing P must reduce its dollar limit by $160,000 ($2,160,000 − $2,000,000). Self employed tax filing Its maximum section 179 expense deduction is $340,000 ($500,000 − $160,000), and it elects to expense that amount. Self employed tax filing Because P's taxable income from the active conduct of all its trades or businesses for the year was $400,000, it can deduct the full $340,000. Self employed tax filing P allocates $100,000 of its section 179 expense deduction and $110,000 of its taxable income to John, one of its partners. Self employed tax filing John also conducts a business as a sole proprietor and in 2013, placed in service in that business, section 179 property costing $28,000. Self employed tax filing John's taxable income from that business was $10,000. Self employed tax filing In addition to the $100,000 allocated from P, he elects to expense the $28,000 of his sole proprietorship's section 179 costs. Self employed tax filing However, John's deduction is limited to his business taxable income of $120,000 ($110,000 from P plus $10,000 from his sole proprietorship). Self employed tax filing He carries over $8,000 ($128,000 − $120,000) of the elected section 179 costs to 2014. Self employed tax filing How Do You Elect the Deduction? You elect to take the section 179 expense deduction by completing Part I of Form 4562. Self employed tax filing If you elect the deduction for listed property, complete Part V of  Form 4562 before completing Part I. Self employed tax filing   File Form 4562 with either of the following: Your original tax return (whether or not you filed it timely), or An amended return filed within the time prescribed by law. Self employed tax filing An election made on an amended return must specify the item of section 179 property to which the election applies and the part of the cost of each such item to be taken into account. Self employed tax filing The amended return must also include any resulting adjustments to taxable income. Self employed tax filing Revoking an election. Self employed tax filing   An election (or any specification made in the election) to take a section 179 expense deduction for 2013 can be revoked without IRS approval by filing an amended return. Self employed tax filing The amended return must be filed within the time prescribed by law. Self employed tax filing The amended return must also include any resulting adjustments to taxable income (for example, allowable depreciation in that tax year for the item of section 179 property for which the election pertains. Self employed tax filing ) Once made, the revocation is irrevocable. Self employed tax filing When Must You Recapture the Deduction? You may have to recapture the section 179 expense deduction if, in any year during the property's recovery period, the percentage of business use drops to 50% or less. Self employed tax filing In the year the business use drops to 50% or less, you include the recapture amount as ordinary income. Self employed tax filing You also increase the basis of the property by the recapture amount. Self employed tax filing Recovery periods for property are discussed later. Self employed tax filing If you sell, exchange, or otherwise dispose of the property, do not figure the recapture amount under the rules explained in this discussion. Self employed tax filing Instead, use the rules for recapturing depreciation explained in  chapter 9 under Section 1245 Property. Self employed tax filing   If the property is listed property, do not figure the recapture amount under the rules explained in this discussion when the percentage of business use drops to 50% or less. Self employed tax filing Instead, use the rules for recapturing depreciation explained in chapter 5 of Publication 946 under Recapture of Excess Depreciation. Self employed tax filing Figuring the recapture amount. Self employed tax filing   To figure the amount to recapture, take the following steps. Self employed tax filing Figure the allowable depreciation for the section 179 expense deduction you claimed. Self employed tax filing Begin with the year you placed the property in service and include the year of recapture. Self employed tax filing Subtract the depreciation figured in (1) from the section 179 expense deduction you actually claimed. Self employed tax filing The result is the amount you must recapture. Self employed tax filing Example. Self employed tax filing In January 2011, Paul Lamb, a calendar year taxpayer, bought and placed in service section 179 property costing $10,000. Self employed tax filing The property is not listed property. Self employed tax filing He elected a $5,000 section 179 expense deduction for the property and also elected not to claim a special depreciation allowance. Self employed tax filing He used the property only for business in 2011 and 2012. Self employed tax filing During 2013, he used the property 40% for business and 60% for personal use. Self employed tax filing He figures his recapture amount as follows. Self employed tax filing Section 179 expense deduction claimed (2011) $5,000 Minus: Allowable depreciation (instead of section 179 expense deduction):   2011 $1,250   2012 1,875   2013 ($1,250 × 40% (business)) 500 3,625 2013 — Recapture amount $1,375     Paul must include $1,375 in income for 2013. Self employed tax filing Where to report recapture. Self employed tax filing   Report any recapture of the section 179 expense deduction as ordinary income in Part IV of Form 4797 and include it in income on Schedule F (Form 1040). Self employed tax filing Recapture for qualified section 179 GO Zone property. Self employed tax filing   If any qualified section 179 GO Zone property ceases to be used in the GO Zone in a later year, you must recapture the benefit of the increased section 179 expense deduction as “other income. Self employed tax filing ” Claiming the Special Depreciation Allowance For qualified property (defined below) placed in service in 2013, you can take an additional 50% special depreciation allowance. Self employed tax filing The allowance is an additional deduction you can take after any section 179 expense deduction and before you figure regular depreciation under MACRS. Self employed tax filing Figure the special depreciation allowance by multiplying the depreciable basis of the qualified property by 50%. Self employed tax filing What is Qualified Property? For farmers, qualified property generally is certain qualified property acquired after December 31, 2007, and placed in service before January 1, 2014. Self employed tax filing Certain qualified property acquired after December 31, 2007, and placed in service before January 1, 2014. Self employed tax filing   Certain qualified property (defined below) acquired after December 31, 2007, and before January 1, 2014, is eligible for a 50% special depreciation allowance. Self employed tax filing   Qualified property includes the following: Tangible property depreciated under the Modified Accelerated Cost Recovery System (MACRS) with a recovery period of 20 years or less. Self employed tax filing Water utility property. Self employed tax filing Off-the-shelf computer software. Self employed tax filing Qualified leasehold improvement property. Self employed tax filing   Qualified property must also meet all of the following tests: You must have acquired qualified property by purchase after December 31, 2007. Self employed tax filing If a binding contract to acquire the property existed before January 1, 2008, the property does not qualify. Self employed tax filing Qualified property must be placed in service after December 31, 2007 and placed in service before January 1, 2014 (before January 1, 2015 for certain property with a long production period and for certain aircraft). Self employed tax filing The original use of the property must begin with you after December 31, 2007. Self employed tax filing For more information, see chapter 3 of Publication 946. Self employed tax filing How Can You Elect Not To Claim the Allowance? You can elect, for any class of property, not to deduct the special depreciation allowance for all property in such class placed in service during the tax year. Self employed tax filing To make the election, attach a statement to your return indicating the class of property for which you are making the election. Self employed tax filing Generally, you must make the election on a timely filed tax return (including extensions) for the year in which you place the property in service. Self employed tax filing However, if you timely filed your return for the year without making the election, you still can make the election by filing an amended return within 6 months of the due date of the original return (not including extensions). Self employed tax filing Attach the election statement to the amended return. Self employed tax filing On the amended return, write “Filed pursuant to section 301. Self employed tax filing 9100-2. Self employed tax filing ” Once made, the election may not be revoked without IRS consent. Self employed tax filing If you elect not to have the special depreciation allowance apply, the property may be subject to an alternative minimum tax adjustment for depreciation. Self employed tax filing When Must You Recapture an Allowance When you dispose of property for which you claimed a special depreciation allowance, any gain on the disposition is generally recaptured (included in income) as ordinary income up to the amount of the special depreciation allowance previously allowed or allowable. Self employed tax filing For more information, see chapter 3 of Publication 946. Self employed tax filing Figuring Depreciation Under MACRS The Modified Accelerated Cost Recovery System (MACRS) is used to recover the basis of most business and investment property placed in service after 1986. Self employed tax filing MACRS consists of two depreciation systems, the General Depreciation System (GDS) and the Alternative Depreciation System (ADS). Self employed tax filing Generally, these systems provide different methods and recovery periods to use in figuring depreciation deductions. Self employed tax filing To be sure you can use MACRS to figure depreciation for your property, see Can You Use MACRS To Depreciate Your Property, earlier. Self employed tax filing This part explains how to determine which MACRS depreciation system applies to your property. Self employed tax filing It also discusses the following information that you need to know before you can figure depreciation under MACRS. Self employed tax filing Property's recovery class. Self employed tax filing Placed-in-service date. Self employed tax filing Basis for depreciation. Self employed tax filing Recovery period. Self employed tax filing Convention. Self employed tax filing Depreciation method. Self employed tax filing Finally, this part explains how to use this information to figure your depreciation deduction. Self employed tax filing Which Depreciation System (GDS or ADS) Applies? Your use of either the General Depreciation System (GDS) or the Alternative Depreciation System (ADS) to depreciate property under MACRS determines what depreciation method and recovery period you use. Self employed tax filing You generally must use GDS unless you are specifically required by law to use ADS or you elect to use ADS. Self employed tax filing Required use of ADS. Self employed tax filing   You must use ADS for the following property. Self employed tax filing All property used predominantly in a farming business and placed in service in any tax year during which an election not to apply the uniform capitalization rules to certain farming costs is in effect. Self employed tax filing Listed property used 50% or less in a qualified business use. Self employed tax filing See Additional Rules for Listed Property , later. Self employed tax filing Any tax-exempt use property. Self employed tax filing Any tax-exempt bond-financed property. Self employed tax filing Any property imported from a foreign country for which an Executive Order is in effect because the country maintains trade restrictions or engages in other discriminatory acts. Self employed tax filing Any tangible property used predominantly outside the United States during the year. Self employed tax filing If you are required to use ADS to depreciate your property, you cannot claim the special depreciation allowance. Self employed tax filing Electing ADS. Self employed tax filing   Although your property may qualify for GDS, you can elect to use ADS. Self employed tax filing The election generally must cover all property in the same property class you placed in service during the year. Self employed tax filing However, the election for residential rental property and nonresidential real property can be made on a property-by-property basis. Self employed tax filing Once you make this election, you can never revoke it. Self employed tax filing   You make the election by completing line 20 in Part III of Form 4562. Self employed tax filing Which Property Class Applies Under GDS? The following is a list of the nine property classes under GDS. Self employed tax filing 3-year property. Self employed tax filing 5-year property. Self employed tax filing 7-year property. Self employed tax filing 10-year property. Self employed tax filing 15-year property. Self employed tax filing 20-year property. Self employed tax filing 25-year property. Self employed tax filing Residential rental property. Self employed tax filing Nonresidential real property. Self employed tax filing See Which Property Class Applies Under GDS in chapter 4 of Publication 946 for examples of the types of property included in each class. Self employed tax filing What Is the Placed-in-Service Date? You begin to claim depreciation when your property is placed in service for use either in a trade or business or for the production of income. Self employed tax filing The placed-in-service date for your property is the date the property is ready and available for a specific use. Self employed tax filing It is therefore not necessarily the date it is first used. Self employed tax filing If you converted property held for personal use to use in a trade or business or for the production of income, treat the property as being placed in service on the conversion date. Self employed tax filing See Placed in Service under When Does Depreciation Begin and End , earlier, for examples illustrating when property is placed in service. Self employed tax filing What Is the Basis for Depreciation? The basis for depreciation of MACRS property is the property's cost or other basis multiplied by the percentage of business/investment use. Self employed tax filing Reduce that amount by any credits and deductions allocable to the property. Self employed tax filing The following are examples of some of the credits and deductions that reduce basis. Self employed tax filing Any deduction for section 179 property. Self employed tax filing Any deduction for removal of barriers to the disabled and the elderly. Self employed tax filing Any disabled access credit, enhanced oil recovery credit, and credit for employer-provided childcare facilities and services. Self employed tax filing Any special depreciation allowance. Self employed tax filing Basis adjustment for investment credit property under section 50(c) of the Internal Revenue Code. Self employed tax filing For information about how to determine the cost or other basis of property, see What Is the Basis of Your Depreciable Property , earlier. Self employed tax filing Also, see chapter 6. Self employed tax filing For additional credits and deductions that affect basis, see section 1016 of the Internal Revenue Code. Self employed tax filing Which Recovery Period Applies? The recovery period of property is the number of years over which you recover its cost or other basis. Self employed tax filing It is determined based on the depreciation system (GDS or ADS) used. Self employed tax filing See Table 7-1 for recovery periods under both GDS and ADS for some commonly used assets. Self employed tax filing For a complete list of recovery periods, see the Table of Class Lives and Recovery Periods in Appendix B of Publication 946. Self employed tax filing House trailers for farm laborers. Self employed tax filing   To depreciate a house trailer you supply as housing for those who work on your farm, use one of the following recovery periods if the house trailer is mobile (it has wheels and a history of movement). Self employed tax filing A 7-year recovery period under GDS. Self employed tax filing A 10-year recovery period under ADS. Self employed tax filing   However, if the house trailer is not mobile (its wheels have been removed and permanent utilities and pipes attached to it), use one of the following recovery periods. Self employed tax filing A 20-year recovery period under GDS. Self employed tax filing A 25-year recovery period under ADS. Self employed tax filing Water wells. Self employed tax filing   Water wells used to provide water for raising poultry and livestock are land improvements. Self employed tax filing If they are depreciable, use one of the following recovery periods. Self employed tax filing A 15-year recovery period under GDS. Self employed tax filing A 20-year recovery period under ADS. Self employed tax filing   The types of water wells that can be depreciated were discussed earlier in Irrigation systems and water wells under Property Having a Determinable Useful Life . Self employed tax filing Table 7-1. Self employed tax filing Farm Property Recovery Periods   Recovery Period in Years Assets GDS ADS Agricultural structures (single purpose) 10 15 Automobiles 5 5 Calculators and copiers 5 6 Cattle (dairy or breeding) 5 7 Communication equipment1 7 10 Computer and peripheral equipment 5 5 Drainage facilities 15 20 Farm buildings2 20 25 Farm machinery and equipment 7 10 Fences (agricultural) 7 10 Goats and sheep (breeding) 5 5 Grain bin 7 10 Hogs (breeding) 3 3 Horses (age when placed in service)     Breeding and working (12 years or less) 7 10 Breeding and working (more than 12 years) 3 10 Racing horses 3 12 Horticultural structures (single purpose) 10 15 Logging machinery and equipment3 5 6 Nonresidential real property 394 40 Office furniture, fixtures, and equipment (not calculators, copiers, or typewriters) 7 10 Paved lots 15 20 Residential rental property 27. Self employed tax filing 5 40 Tractor units (over-the-road) 3 4 Trees or vines bearing fruit or nuts 10 20 Truck (heavy duty, unloaded weight 13,000 lbs. Self employed tax filing or more) 5 6 Truck (actual weight less than 13,000 lbs) 5 5 Water wells 15 20 1 Not including communication equipment listed in other classes. Self employed tax filing 2 Not including single purpose agricultural or horticultural structures. Self employed tax filing 3 Used by logging and sawmill operators for cutting of timber. Self employed tax filing 4 For property placed in service after May 12, 1993; for property placed in service before May 13, 1993,  the recovery period is 31. Self employed tax filing 5 years. Self employed tax filing Which Convention Applies? Under MACRS, averaging conventions establish when the recovery period begins and ends. Self employed tax filing The convention you use determines the number of months for which you can claim depreciation in the year you place property in service and in the year you dispose of the property. Self employed tax filing Use one of the following conventions. Self employed tax filing The half-year convention. Self employed tax filing The mid-month convention. Self employed tax filing The mid-quarter convention. Self employed tax filing For a detailed explanation of each convention, see Which Convention Applies in chapter 4 of Publication 946. Self employed tax filing Also, see the Instructions for Form 4562. Self employed tax filing Which Depreciation Method Applies? MACRS provides three depreciation methods under GDS and one depreciation method under ADS. Self employed tax filing The 200% declining balance method over a GDS recovery period. Self employed tax filing The 150% declining balance method over a GDS recovery period. Self employed tax filing The straight line method over a GDS recovery period. Self employed tax filing The straight line method over an ADS recovery period. Self employed tax filing Depreciation Table. Self employed tax filing   The following table lists the types of property you can depreciate under each method. Self employed tax filing The declining balance method is abbreviated as DB and the straight line method is abbreviated as SL. Self employed tax filing Depreciation Table System/Method   Type of Property GDS using  150% DB • All property used in a farming business (except real property)   • All 15- and 20-year property   • Nonfarm 3-, 5-, 7-, and 10-year property1 GDS using SL • Nonresidential real property   • Residential rental property   • Trees or vines bearing fruit or nuts   • All 3-, 5-, 7-, 10-, 15-, and 20-year property1 ADS using SL • Property used predomi- nantly outside the United States   • Farm property used when an election not to apply the uniform capitalization rules is in effect   • Tax-exempt property   • Tax-exempt bond-financed property   • Imported property2   • Any property for which you elect to use this method1 GDS using  200% DB • Nonfarm 3-, 5-, 7-, and 10-year property 1Elective method 2See section 168(g)(6) of the Internal Revenue  Code Property used in farming business. Self employed tax filing   For personal property placed in service after 1988 in a farming business, you must use the 150% declining balance method over a GDS recovery period or you can elect one of the following methods. Self employed tax filing The straight line method over a GDS recovery period. Self employed tax filing The straight line method over an ADS recovery period. Self employed tax filing For property placed in service before 1999, you could have elected to use the 150% declining balance method using the ADS recovery periods for certain property classes. Self employed tax filing If you made this election, continue to use the same method and recovery period for that property. Self employed tax filing Real property. Self employed tax filing   You can depreciate real property using the straight line method under either GDS or ADS. Self employed tax filing Switching to straight line. Self employed tax filing   If you use a declining balance method, you switch to the straight line method in the year it provides an equal or greater deduction. Self employed tax filing If you use the MACRS percentage tables, discussed later under How Is the Depreciation Deduction Figured , you do not need to determine in which year your deduction is greater using the straight line method. Self employed tax filing The tables have the switch to the straight line method built into their rates. Self employed tax filing Fruit or nut trees and vines. Self employed tax filing   Depreciate trees and vines bearing fruit or nuts under GDS using the straight line method over a 10-year recovery period. Self employed tax filing ADS required for some farmers. Self employed tax filing   If you elect not to apply the uniform capitalization rules to any plant shown in Table 6-1 of chapter 6 and produced in your farming business, you must use ADS for all property you place in service in any year the election is in effect. Self employed tax filing See chapter 6 for a discussion of the application of the uniform capitalization rules to farm property. Self employed tax filing Electing a different method. Self employed tax filing   As shown in the Depreciation Table , you can elect a different method for depreciation for certain types of property. Self employed tax filing You must make the election by the due date of the return (including extensions) for the year you placed the property in service. Self employed tax filing However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of your return (excluding extensions). Self employed tax filing Attach the election to the amended return and write “Filed pursuant to section 301. Self employed tax filing 9100-2” on the election statement. Self employed tax filing File the amended return at the same address you filed the original return. Self employed tax filing Once you make the election, you cannot change it. Self employed tax filing    If you elect to use a different method for one item in a property class, you must apply the same method to all property in that class placed in service during the year of the election. Self employed tax filing However, you can make the election on a property-by-property basis for residential rental and nonresidential real property. Self employed tax filing Straight line election. Self employed tax filing   Instead of using the declining balance method, you can elect to use the straight line method over the GDS recovery period. Self employed tax filing Make the election by entering “S/L” under column (f) in Part III of Form 4562. Self employed tax filing ADS election. Self employed tax filing   As explained earlier under Which Depreciation System (GDS or ADS) Applies , you can elect to use ADS even though your property may come under GDS. Self employed tax filing ADS uses the straight line method of depreciation over the ADS recovery periods, which are generally longer than the GDS recovery periods. Self employed tax filing The ADS recovery periods for many assets used in the business of farming are listed in Table 7–1. Self employed tax filing Additional ADS recovery periods for other classes of property may be found in the Table of Class Lives and Recovery Periods in Appendix B of Publication 946. Self employed tax filing How Is the Depreciation Deduction Figured? To figure your depreciation deduction under MACRS, you first determine the depreciation system, property class, placed-in-service date, basis amount, recovery period, convention, and depreciation method that applies to your property. Self employed tax filing Then you are ready to figure your depreciation deduction. Self employed tax filing You can figure it in one of two ways. Self employed tax filing You can use the percentage tables provided by the IRS. Self employed tax filing You can figure your own deduction without using the tables. Self employed tax filing Figuring your own MACRS deduction will generally result in a slightly different amount than using the tables. Self employed tax filing Using the MACRS Percentage Tables To help you figure your deduction under MACRS, the IRS has established percentage tables that incorporate the applicable convention and depreciation method. Self employed tax filing These percentage tables are in Appendix A of Publication 946. Self employed tax filing Rules for using the tables. Self employed tax filing   The following rules cover the use of the percentage tables. Self employed tax filing You must apply the rates in the percentage tables to your property's unadjusted basis. Self employed tax filing Unadjusted basis is the same basis amount you would use to figure gain on a sale but figured without reducing your original basis by any MACRS depreciation taken in earlier years. Self employed tax filing You cannot use the percentage tables for a short tax year. Self employed tax filing See chapter 4 of Publication 946 for information on how to figure the deduction for a short tax year. Self employed tax filing You generally must continue to use them for the entire recovery period of the property. Self employed tax filing You must stop using the tables if you adjust the basis of the property for any reason other than— Depreciation allowed or allowable, or An addition or improvement to the property, which is depreciated as a separate property. Self employed tax filing Basis adjustment due to casualty loss. Self employed tax filing   If you reduce the basis of your property because of a casualty, you cannot continue to use the percentage tables. Self employed tax filing For the year of the adjustment and the remaining recovery period, you must figure the depreciation yourself using the property's adjusted basis at the end of the year. Self employed tax filing See Figuring the Deduction Without Using the Tables in chapter 4 of Publication 946. Self employed tax filing Figuring depreciation using the 150% DB method and half-year convention. Self employed tax filing    Table 7-2 has the percentages for 3-, 5-, 7-, and 20-year property. Self employed tax filing The percentages are based on the 150% declining balance method with a change to the straight line method. Self employed tax filing This table covers only the half-year convention and the first 8 years for 20-year property. Self employed tax filing See Appendix A in Publication 946 for complete MACRS tables, including tables for the mid-quarter and mid-month convention. Self employed tax filing   The following examples show how to figure depreciation under MACRS using the percentages in Table 7-2 . Self employed tax filing Example 1. Self employed tax filing During the year, you bought an item of 7-year property for $10,000 and placed it in service. Self employed tax filing You do not elect a section 179 expense deduction for this property. Self employed tax filing In addition, the property is not qualified property for purposes of the special depreciation allowance. Self employed tax filing The unadjusted basis of the property is $10,000. Self employed tax filing You use the percentages in Table 7-2 to figure your deduction. Self employed tax filing Since this is 7-year property, you multiply $10,000 by 10. Self employed tax filing 71% to get this year's depreciation of $1,071. Self employed tax filing For next year, your depreciation will be $1,913 ($10,000 × 19. Self employed tax filing 13%). Self employed tax filing Example 2. Self employed tax filing You had a barn constructed on your farm at a cost of $20,000. Self employed tax filing You placed the barn in service this year. Self employed tax filing You elect not to claim the special depreciation allowance. Self employed tax filing The barn is 20-year property and you use the table percentages to figure your deduction. Self employed tax filing You figure this year's depreciation by multiplying $20,000 (unadjusted basis) by 3. Self employed tax filing 75% to get $750. Self employed tax filing For next year, your depreciation will be $1,443. Self employed tax filing 80 ($20,000 × 7. Self employed tax filing 219%). Self employed tax filing Table 7-2. Self employed tax filing 150% Declining Balance Method (Half-Year Convention) Year 3-Year 5-Year 7-Year 20-Year 1 25. Self employed tax filing 0 % 15. Self employed tax filing 00 % 10. Self employed tax filing 71 % 3. Self employed tax filing 750 % 2 37. Self employed tax filing 5   25. Self employed tax filing 50   19. Self employed tax filing 13   7. Self employed tax filing 219   3 25. Self employed tax filing 0   17. Self employed tax filing 85   15. Self employed tax filing 03   6. Self employed tax filing 677   4 12. Self employed tax filing 5   16. Self employed tax filing 66   12. Self employed tax filing 25   6. Self employed tax filing 177   5     16. Self employed tax filing 66   12. Self employed tax filing 25   5. Self employed tax filing 713   6     8. Self employed tax filing 33   12. Self employed tax filing 25   5. Self employed tax filing 285   7         12. Self employed tax filing 25   4. Self employed tax filing 888   8         6. Self employed tax filing 13   4. Self employed tax filing 522   Figuring depreciation using the straight line method and half-year convention. Self employed tax filing   The following table has the straight line percentages for 3-, 5-, 7-, and 20-year property using the half-year convention. Self employed tax filing The table covers only the first 8 years for 20-year property. Self employed tax filing See Appendix A in Publication 946 for complete MACRS tables, including tables for the mid-quarter and mid-month convention. Self employed tax filing Table 7-3. Self employed tax filing Straight Line Method (Half-Year Convention) Year 3-Year 5-Year 7-Year 20-Year 1 16. Self employed tax filing 67 % 10 % 7. Self employed tax filing 14 % 2. Self employed tax filing 5 % 2 33. Self employed tax filing 33   20   14. Self employed tax filing 29   5. Self employed tax filing 0   3 33. Self employed tax filing 33   20   14. Self employed tax filing 29   5. Self employed tax filing 0   4 16. Self employed tax filing 67   20   14. Self employed tax filing 28   5. Self employed tax filing 0   5     20   14. Self employed tax filing 29   5. Self employed tax filing 0   6     10   14. Self employed tax filing 28   5. Self employed tax filing 0   7         14. Self employed tax filing 29   5. Self employed tax filing 0   8         7. Self employed tax filing 14   5. Self employed tax filing 0