IRS Tax Forms
Form 4562: Depreciation, Section 179, and Filing Instructions
Form 4562 reports depreciation, Section 179 deductions, special depreciation allowances, and amortization of qualifying business or investment costs. It also records required vehicle and listed-property information. Attach it to the applicable tax return when required. The deduction depends on the asset, business use, acquisition and placed-in-service dates, elections, and statutory limits, not simply the purchase price.
Tax year covered: 2025 returns filed in 2026
Official sources
Official IRS Form 4562 Resources
Quick reference
Form 4562 at a Glance
Question; Quick answer
- What does it report?
- Depreciation, Section 179, special depreciation allowances, listed property, and amortization.
- Who commonly uses it?
- Sole proprietors, landlords, partnerships, corporations, and other eligible taxpayers with a filing trigger.
- Is every asset fully deductible immediately?
- No. Eligibility, basis, business use, elections, and limitations control.
- Is land depreciable?
- No. Allocate land separately from a depreciable building.
- What is the 2025 Section 179 maximum?
- $2,500,000, reduced when qualifying property placed in service exceeds $4,000,000, subject to other limits.
- Is it filed separately?
- No. It accompanies the return for the relevant business or activity.
Form purpose
What Is Form 4562?
Form 4562, Depreciation and Amortization, explains how eligible asset costs become tax deductions. Depreciation generally recovers the basis of tangible property over time. Amortization recovers specified costs under the rules for the particular intangible or expenditure.
Buying equipment and recording an accounting expense do not automatically establish the federal deduction. A tax asset schedule should show what was acquired, when it became available for use, the deductible business portion, and how its remaining basis changes each year.
For a sole proprietor, depreciation can affect Schedule C business profit and related tax calculations. For a landlord, it generally enters the rental activity. Form 4562 supports those calculations rather than replacing the underlying return.
Filing requirements
Who Must File Form 4562?
The IRS instructions identify these common triggers:
- Depreciation on property placed in service during 2025.
- A Section 179 deduction, including an eligible prior-year carryover.
- Depreciation on a vehicle or other listed property, regardless of its original service year.
- A vehicle deduction reported somewhere other than Schedule C.
- Depreciation on a corporate income tax return other than Form 1120-S.
- Amortization of costs that begins during 2025.
Continuing depreciation on older, nonlisted property does not by itself require every individual or S corporation to file the form annually. Other filing triggers may still apply. Keep the depreciation schedule even when no new Form 4562 is required.
Prepare a separate form for each business or activity requiring one, but follow the summary instructions for coordinating Section 179 across activities. Do not multiply the overall Section 179 limit by the number of businesses. Certain employees claiming permitted job-related vehicle expenses use Form 2106 instead.
Quick comparison
Section 179 vs Bonus Depreciation vs MACRS
MACRS means the Modified Accelerated Cost Recovery System, which assigns recovery periods, methods, and conventions for depreciation.
| Treatment | How it works | Important distinction |
|---|---|---|
| Section 179 | Elect to expense qualifying purchased property, within applicable limits | Dollar, investment, business-use, and business-income limits apply |
| Bonus depreciation | Additional first-year allowance for qualifying property | Acquisition and service dates matter; elections can change the result |
| Regular MACRS | Recover remaining depreciable basis using a recovery period, method, and convention | The first-year deduction is not always cost divided by useful life |
| Amortization | Recover specified costs over the period required or elected under the applicable provision | Not every intangible follows the same rules |
The usual ordering is Section 179 first, bonus depreciation second, and regular depreciation on the remaining basis. Never apply each percentage to the original cost independently. An accelerated deduction changes the timing of cost recovery; it is not a credit refunding the asset's purchase price.
Tax guidance
2025 Section 179 and Bonus Depreciation Rules
Section 179 limits
For tax years beginning in 2025, the maximum deduction is $2,500,000. Reduce that ceiling dollar for dollar when the cost of qualifying Section 179 property placed in service exceeds $4,000,000. At $6,500,000, that dollar ceiling is fully phased out.
An additional business-income limit can restrict the current deduction. Eligible amounts disallowed by that income limit generally carry forward. A pass-through deduction can face limitations at both the entity and owner levels. The 2025 Section 179 cap for certain heavy SUVs is $31,300, with exceptions and separate vehicle limitations. It is not a universal deduction for any vehicle over 6,000 pounds.
Why the acquisition date matters for bonus depreciation
The 2025 instructions reflect legislation restoring a 100% special depreciation allowance for qualifying property acquired and placed in service after January 19, 2025.
| Ordinary qualifying property placed in service in 2025 | General bonus treatment before elections |
|---|---|
| Acquired after January 19, 2025, and placed in service after that date | 100% |
| Acquired before January 20, 2025, under the earlier rules | Generally 40% |
Certain aircraft, long-production-period property, specified plants, and qualified production property have additional rules. A transition election can permit 40% instead of 100%, or 60% for qualifying long-production-period property and certain aircraft, for the first tax year ending after January 19, 2025. A separate election out of bonus depreciation generally applies by property class.
Check binding-contract and acquisition rules, related-party restrictions, and whether used property qualifies. An invoice payment date alone may not establish the acquisition date. Ordinary buildings do not become eligible for 100% bonus merely because the law changed; qualified production property is a separate, conditional provision.
Section 179 generally cannot exceed its business-income limitation. Bonus depreciation is not subject to that same limitation, although resulting losses can face other restrictions. State conformity must be checked separately.
Preparation records
Records to Collect Before Filing
- Asset description, invoice, acquisition date, and placed-in-service date.
- Cost and other capitalized acquisition or improvement costs.
- Business-use percentage and support for mixed-use assets.
- Recovery class, depreciation method, convention, and applicable elections.
- Prior depreciation, adjusted basis, and Section 179 carryovers.
- Land/building allocations and relevant rental-property records.
- Vehicle mileage logs, total miles, and written business-purpose evidence.
- Asset sales, trade-ins, conversions to personal use, and disposition proceeds.
- Amortizable costs, the governing Code section, and the start date.
Placed in service generally means ready and available for its intended use. Equipment delivered in December but not ready for use until January may belong in the later year's depreciation calculation. Financing an eligible purchase does not mean depreciation is limited to that year's loan principal payments.
Form walkthrough
Form 4562 Instructions by Part
Part I: Section 179, lines 1 through 13
Enter the applicable dollar limit, total qualifying investment, reduction, and elected costs. Listed-property elections originate in Part V. Bring eligible prior carryovers to line 10, calculate the business-income limitation on line 11, the allowed deduction on line 12, and the carryover on line 13.
Part II: Special allowance and other depreciation
Line 14 generally reports the special depreciation allowance for property other than listed property. Lines 15 and 16 address specified other depreciation treatments. Listed property belongs in Part V, not these lines.
Part III: MACRS depreciation
| Section | What to complete |
|---|---|
| A, lines 17 and 18 | Continuing MACRS deductions and any general-asset-account election |
| B, line 19 | Newly placed-in-service property under the General Depreciation System |
| C, line 20 | Property using the Alternative Depreciation System |
For new assets, identify the service month/year, business basis, recovery period, convention, method, and deduction. Half-year and mid-quarter conventions can produce different first-year amounts. The mid-quarter test generally concerns whether more than 40% of the relevant depreciable basis was placed in service in the final three months, subject to exclusions. Real property generally uses a mid-month convention.
Part IV: Summary, lines 21 through 23b
Line 21 brings in listed-property depreciation. Line 22 combines the specified deductions for reporting on the appropriate return lines. Lines 23a and 23b request information about certain Section 263A costs included in new-asset basis; they are not extra deductions.
Partnerships and S corporations must follow the allocation instructions rather than treating every amount as an entity-level deduction. Section 179 commonly passes through separately.
Parts V and VI: Listed property and amortization
Part V records business-use evidence, listed-property deductions, vehicle use, and applicable employer questions. Complete it before the earlier parts when the instructions require. Part VI lists new amortization on line 42, continuing amounts on line 43, and the total on line 44. Report amortization using its appropriate activity/expense line, not automatically the depreciation line.
Worked examples
Form 4562 Calculation Examples
Example 1: Qualifying 100% bonus depreciation
Assume a sole proprietor acquires qualifying office equipment in February 2025 and places it in service in March. Cost is $12,000, supported business use is 80%, no Section 179 is elected, and all bonus requirements are satisfied.
| Calculation | Amount |
|---|---|
| Cost | $12,000 |
| Business-use basis, $12,000 × 80% | $9,600 |
| Eligible bonus allowance, $9,600 × 100% | $9,600 |
| Remaining business depreciable basis | $0 |
The personal $2,400 is not deductible. The $9,600 deduction is not $9,600 of tax savings. Separate loss limitations may affect its use.
Example 2: Earlier acquisition with 40% bonus
Assume ordinary eligible five-year property was acquired in December 2024 and placed in service in February 2025. Its business basis is $10,000. No Section 179 is elected, and the 200% declining-balance method and half-year convention apply.
Bonus is $4,000. Remaining basis is $6,000. The first-year MACRS percentage is 20%, producing another $1,200. Total first-year depreciation is $5,200, not $6,000. Different conventions, elections, or asset classes change the result.
Example 3: Section 179 limited by business income
Assume $20,000 of qualifying equipment cost is elected under Section 179. The investment-based ceiling is not reduced, there is no prior carryover, and the properly calculated business-income limit is $15,000. Line 12 is $15,000 and line 13 carries $5,000 to the following year.
The maximum statutory deduction does not override the income limit. Do not also deduct the same elected cost under bonus depreciation or regular MACRS. Review the Section 179 election and remaining asset basis together before choosing the combination of deductions.
Tax guidance
Vehicle and Listed-Property Rules
Buying a business vehicle does not automatically make its full cost deductible. Establish qualified business use, exclude commuting, and apply the passenger-auto limits or other relevant vehicle rules.
Listed property generally must exceed 50% qualified business use for Section 179 and bonus treatment. Lower business use can require different depreciation, and a later drop to 50% or less can trigger recapture of excess accelerated deductions. Investment use and qualified business use are not interchangeable for every test.
The standard mileage method already includes a depreciation component. Do not add separate depreciation, Section 179, or bonus for the same mileage-method vehicle. Prior elections can also prevent a later switch to standard mileage. See Publication 463.
Keep a contemporaneous log showing dates, destinations, purposes, business miles, and total annual miles. Part V's aircraft question and applicable employer-vehicle questions require separate attention.
Tax guidance
What Belongs in the Amortization Section?
Some acquired business intangibles, including qualifying goodwill under Section 197, are generally amortized over 15 years. Other costs have different rules. For example, eligible $30,000 Section 197 goodwill beginning amortization in July produces six months of amortization, or $1,000, for a calendar 2025 year: $30,000 ÷ 180 × 6.
Do not automatically amortize all research costs over the same period. The 2025 instructions distinguish domestic research expenditures under Section 174A from foreign research expenditures, which generally require 15-year amortization. Review current rules and elections for research, startup, organizational, and software costs separately.
Filing guidance
How and When to File Form 4562
Attach the form to the relevant income tax return through compatible software or the permitted paper process. For sole proprietors, applicable depreciation and Section 179 generally feed Schedule C, line 13. Rental, farming, corporate, partnership, and amortization reporting use their own destinations.
Home-office building depreciation is an important exception to simply using Schedule C, line 13. It enters the Form 8829 calculation and the allowable home-office deduction on Schedule C, line 30. A supporting Form 4562 may still be required, but the same depreciation is not deducted twice.
Most calendar-year 2025 individual returns were due April 15, 2026; a valid filing extension generally ran to October 15, 2026, without extending payment time. Entity deadlines differ. Check IRS filing deadlines and relief.
Keep the asset schedule through ownership and disposition. Depreciation generally reduces basis even when it was allowable but not claimed. A later sale can require Form 4797 and depreciation-recapture analysis.
For errors, determine whether an amended return, a permitted election change, or an accounting-method change using Form 3115 is appropriate. Repeated missed depreciation is not always corrected by simply amending one return.
Review checklist
Common Form 4562 Mistakes
| Mistake | Review check |
|---|---|
| Using a pre-legislation 2025 bonus percentage | Check acquisition/service dates and the finalized instructions |
| Deducting land or personal use | Reconcile eligible business basis |
| Applying several deductions to the full original cost | Reduce basis in the proper order |
| Ignoring the Section 179 income limit | Track the allowed amount and carryover |
| Using the wrong convention | Test mid-quarter rules before applying tables |
| Expensing the loan payment and depreciating the asset | Separate principal, interest, and cost recovery |
| Dropping an asset from the schedule after sale | Reconcile basis and disposition reporting |
Filing questions
Form 4562 Frequently Asked Questions
Is Form 4562 required every year?
Not for every taxpayer or every asset. Review the filing triggers, especially new assets, listed property, Section 179, corporate-return rules, and new amortization. Annual workpaper maintenance is still necessary.
Can Form 4562 create a business loss?
Bonus or regular depreciation may contribute to a loss. Section 179 has its own business-income limitation. Basis, at-risk, passive-activity, and excess-business-loss rules may further restrict deductions.
Is Form 4562 the same as Form 4797?
No. Form 4562 generally addresses cost recovery while an asset is used. Form 4797 addresses relevant dispositions and recapture. Both rely on consistent basis and depreciation records.
Can I complete Form 4562 online?
Yes, using compatible return-preparation software. Check the generated asset detail, service dates, elections, and carryovers rather than accepting an imported fixed-asset total without review.
Where can I download Form 4562?
Use the official 2025 PDF and 2025 instructions. Confirm the revision when preparing a different tax year.
Related references
Related IRS Forms and Sources
Form or source; Why it is related
Tax information
Important Tax Information Disclaimer
This guide provides general educational information about the 2025 Form 4562, not personalized tax, legal, or investment advice. Asset treatment depends on the facts, elections, ownership, and complete return. Use the correct tax-year materials and consult a qualified tax professional.
