Start A Business

Step 6: Depreciation Car Expenses

If property you acquire to use in your business has a useful life longer than one year, you generally cannot deduct the entire cost as a business expense in the year you acquire it. You must spread the cost over more than one tax year and deduct part of it each year. This method of deducting the cost of business property is called depreciation.

Examples of business property you must depreciate are: office furniture, building, and machinery and equipment. You can choose to deduct a limited amount of the cost of certain depreciable property in the year you purchase it for use in your business. This deduction is known as the "section 179 deduction."