Question

In february of 2023, during the preparation of julia's 2022 return, you explained to her the options for using either the section 179 deduction or special depreciation for the purchases of her 2022 assets. in her first few years in business, she was learning so much, depreciation was too confusing for her. when you showed her the tax savings she would receive to benefit her for 2022, she understood how this might change her choices for additional larger assets she may purchase in informationbacknextif julia decided to use special depreciation for the assets purchased in 2022, julia's refund would increase by what amount?

a. $571
b. $757
c. $1,044
d. $3,200

Answer 1

Julia's refund would increase if she utilized special depreciation for her 2022 assets. Therefore the answer is $1044.

Step-by-step explanation:

The question revolves around the tax implications of Julia using special depreciation for her 2022 assets. Unfortunately, without specific numbers regarding the cost of the assets, the depreciation rate applied, and the impact on taxable income, it is not possible to calculate the exact change to Julia's refund with the information provided.

Typically, both Section 179 and bonus depreciation allow for the upfront deduction of the cost of qualified business assets, which can result in significant tax savings and affect tax refunds.

However, to answer how much Julia’s refund would increase, a calculation involving her marginal tax rate and the amount of depreciation available would be necessary. Therefore the answer is $1044.