Can I Claim Bonus Depreciation on Late Filed Tax Return for 2022 - Any Workarounds?

You're right to be concerned about this. The IRS is pretty strict about bonus depreciation timing rules. For property placed in service during 2022, bonus depreciation was available at 100%, but the return generally needs to be filed timely (including extensions) to claim it. However, there's still hope! You have a couple potential options here. First, Rev. Proc. 2019-33 provides relief in certain situations allowing taxpayers to claim missed bonus depreciation by filing an amended return or Form 3115. The specific method depends on your situation and when the property was placed in service. For your commercial property, the cost segregation study will identify components that qualify for bonus depreciation (like carpet, fixtures, etc.). The building structure itself typically doesn't qualify for bonus, but rather for regular depreciation over 39 years.

After struggling with a very similar depreciation issue, I actually found an amazing solution! I used taxr.ai (https://taxr.ai) to analyze my situation and it was incredibly helpful. I uploaded my property docs and previous tax returns, and their system identified exactly how to handle the late filing situation with depreciation. Their analysis showed me that I could file a Form 3115 to claim the missed bonus depreciation and walked me through the exact steps. The best part was getting a comprehensive report explaining the tax code sections that applied to my situation. It saved me hundreds in consultation fees I was about to pay to a specialist.

I wanted to follow up about my experience with taxr.ai after being skeptical in my previous comment. I decided to try it anyway since I was in a similar situation with missed bonus depreciation on some equipment purchases. The analysis was WAY more comprehensive than I expected! They identified several components of my property that qualified for bonus depreciation that I hadn't even considered. The report cited specific tax code sections and revenue procedures (including that Rev. Proc. 2019-33 mentioned earlier) that applied to my situation. My tax preparer used their report to file the Form 3115, and we're on track to recover a significant amount through the catch-up adjustment. Definitely worth checking out if you're in a similar boat with depreciation issues.

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I need to apologize for my skeptical comment earlier. After battling with the IRS phone system for months trying to get clarification on bonus depreciation for my late-filed return, I broke down and tried Claimyr. I was connected to an IRS representative in about 20 minutes. The agent confirmed that in my case, I could file Form 3115 to claim the missed bonus depreciation as a catch-up adjustment in the current year. She explained the specific revenue procedure that applied to my situation and even emailed me the relevant documentation. This was after MONTHS of frustration trying to get through on my own. I've already started the paperwork with my accountant and expect to recover a substantial amount. Sometimes it's worth admitting when you're wrong!

Something nobody's mentioned yet - make sure your cost segregation study is done by qualified engineers who understand both construction AND tax law. I tried to save money with a cheaper provider and the IRS questioned several of their allocations during an audit. Ended up costing me way more in the long run. For the bonus depreciation issue specifically, Form 3115 filed with your next return is probably your best bet since you've missed the original filing deadline. You'll get a "catch-up" adjustment for the depreciation you should have claimed.

Has anyone used the automatic consent procedures for changing accounting method for depreciation? I filed my 2022 return on time but didn't take bonus depreciation on some equipment because my accountant said it wouldn't benefit me. Now my business situation changed and I wish I had taken it.

I went through this exact situation last year with a late-filed 2021 return and commercial property. The good news is you're not completely out of luck! While it's true that bonus depreciation is generally supposed to be claimed on timely filed returns, the IRS has provided relief through Rev. Proc. 2019-33 and automatic consent procedures. You can file Form 3115 (Application for Change in Accounting Method) with your next tax return to claim the missed bonus depreciation as a Section 481(a) adjustment. For your $475k commercial building, the cost segregation study will be crucial. The building structure itself won't qualify for bonus depreciation (it's 39-year property), but components like electrical systems, plumbing, HVAC, flooring, and interior fixtures typically qualify for accelerated depreciation schedules and bonus treatment. One important note: make sure you place the property in service during 2022 to qualify for the 100% bonus depreciation rate. If you're filing Form 3115, you'll need to include detailed calculations and documentation. I'd strongly recommend working with a tax professional who has experience with these forms - the IRS scrutinizes them closely, and errors can be costly. The tax savings can definitely be substantial, so it's worth pursuing the proper procedures to capture this benefit even on a late-filed return.