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How to resolve Lacerte diagnostic ref. 584 Schedule C Auto and Truck Expenses Evidence Requirement

by Lacerte Tax 2023 Updated 6 months ago

The following diagnostic is generating:

  • Schedule C: Auto and truck expenses require evidence to support the deduction. Failure to provide this support on Schedule C Part IV or Form 4562 Part V will cause the e-file return to be rejected by the IRS. If the vehicle in question is a heavy truck, mark the listed property checkbox or use a method for vehicles over 6000 lbs. in the depreciation input (Screen 22; Code 29) to satisfy the IRS e-file specifications for Reject 183. (ref. #584)

This diagnostic may generate in two situations:

  • An adjustment has been entered for vehicle expenses, or
  • A vehicle linked to the Schedule C is missing required information.

First, check for a vehicle expense adjustment

  1. Go to Screen 16, Business Income (Sch. C).
  2. Scroll until you see the Expenses section.
  3. Delete any entries in Car and truck expenses [A].
  4. Repeat steps 1 through 3 for each Schedule C.

Next, make sure your vehicle entries are complete

Schedule C car and truck expenses can be entered on Screen 22 for depreciated vehicles, or Screen 30 for vehicles not being depreciated. Follow the steps for the screen you're using below.

For depreciated vehicles on Screen 22:

  1. Go to Screen 22, Depreciation.
  2. Select the vehicle in the Asset panel.
  3. Verify the Date placed and service and Cost or basis have been entered.
  4. Under the Methods column, verify an allowed method is selected:
    • 53 or 54 automobile limits not applied designated as Listed property;
    • 55 or 56 automobile limits applied;
    • 45 or 46 truck limits applied; or
    • 43 or 44 automobile limits not applied designated as Listed property.
  5. Scroll down to the Automobiles and Other Listed Property section.
  6. If using method 43, 44, 53, or 54, make sure the Listed property box is checked.
  7. Verify both the Total mileage and Business mileage have been entered.

For vehicles not being depreciated on Screen 30:

  1. Go to Screen 30, Vehicle/Emp. Bus. Expense.
  2. In the Form (Ctrl+T) field, verify you've selected 2=Schedule C.
  3. Make sure the correct Schedule C is chosen in Activity name or number (Ctrl+T).
  4. Scroll to Vehicle Expenses.
  5. Verify each of the following fields have been completed:
    • Description of vehicle
    • Date placed in service
    • Total mileage
    • Business Mileage

If the diagnostic continues to generate:

Check the Car and Truck Expenses section on Screen 22, Depreciation for values you may have entered accidentally.

Lacerte Tax

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