Create Form 4562 for depreciation and amortization

Form 4562, Depreciation and Amortization, is where a business claims its deduction for depreciation and amortization, elects to expense certain property under Section 179, and reports the business use of vehicles and other listed property. It attaches to your income tax return, and the total it produces carries to the schedule for your business or activity.

You file Form 4562 if you're claiming depreciation on property placed in service during the tax year, a Section 179 deduction, depreciation on a vehicle or other listed property regardless of when it was placed in service, amortization of costs that began this year, or a vehicle deduction on a form other than Schedule C. If none of those apply, you may not need the form this year.

Both let you write off an asset's cost faster than ordinary depreciation, but they work differently. Section 179 is elected asset by asset, is capped at a dollar limit per year, and can't create a business loss. Bonus depreciation applies automatically to eligible property unless you elect out, has no dollar cap, and can create a loss. Many filers use Section 179 first, then bonus for the rest.

For tax years beginning in 2025, the Section 179 maximum deduction is $2,500,000, and it starts to phase out dollar for dollar once you place more than $4,000,000 of qualifying property in service. These figures were raised by the One Big Beautiful Bill Act (P.L. 119-21). The cap on heavy SUVs stays at $31,300. Confirm current amounts with the IRS before you file.

Yes, with a date catch. The One Big Beautiful Bill Act restored 100% bonus depreciation for qualified property acquired and placed in service after January 19, 2025. Property placed in service earlier in 2025, from January 1 through January 19, generally falls under the old phase-down rate of 40%. It's reported on Form 4562, Part II, line 14, so the placed-in-service date matters.

MACRS, the Modified Accelerated Cost Recovery System, is the method most business property uses for depreciation. It assigns each asset to a class with a set recovery period, from 3 years up to 39 years, and a method and convention that decide how the deduction spreads across those years. MACRS is reported in Part III of Form 4562.

The recovery period comes from the asset's MACRS class. Computers, vehicles, and general equipment are usually 5-year property; office furniture and fixtures are 7-year; land improvements are 15-year; residential rental buildings are 27.5-year; and nonresidential real property is 39-year. IRS Publication 946 lists the class and recovery period for most kinds of property.

Listed property is property that can be used for both business and personal reasons, most commonly passenger automobiles and other vehicles. It's reported in Part V, and it has to be used more than 50 percent for business to qualify for Section 179 or accelerated depreciation. If business use is 50 percent or less, you generally have to use the straight-line method instead.

Yes, if you use the actual-expense method and the vehicle is used for business. A vehicle is listed property, so it goes in Part V with its business-use percentage, and passenger automobiles have annual dollar caps on depreciation. If you use the standard mileage rate instead, you don't depreciate the vehicle separately, and heavy vehicles over 6,000 pounds follow different rules.

The half-year convention treats property as placed in service at the midpoint of the year, so you get half a year of depreciation in the first year no matter which month you bought it. It's the default for most personal property. If more than 40 percent of your personal-property basis is placed in service in the last three months of the year, the mid-quarter convention applies instead.

No. Land doesn't wear out or get used up, so it isn't depreciable and never goes on Form 4562. When you buy real estate, you allocate the purchase price between the land and the building, and only the building and other improvements are depreciated. Land improvements like fencing or paving can be depreciated as 15-year property.

Line 22 in Part IV adds up your Section 179, bonus, MACRS, and listed-property deductions into one total. You carry that total to the appropriate line of your return, such as Schedule C for a sole proprietorship, Schedule E for rentals, or Schedule F for farming. Partnerships and S corporations follow separate instructions for passing it through.

Part VI handles amortization, which is the depreciation-like write-off of certain intangible costs over time. It covers Section 197 intangibles such as goodwill, patents, trademarks, and licenses, usually over 15 years, along with things like business startup and organizational costs. Costs that began amortizing this year go on line 42; earlier ones go on line 43.

Generally yes. You file a separate Form 4562 for each business or activity that has depreciation or amortization to report. So a sole proprietor with two Schedule C businesses, or someone with both a business and a rental, would complete a separate form for each one, and each total carries to its own schedule.

No. The generator helps you fill out and produce a completed Form 4562 that you can review and attach to your return, then file with the IRS yourself. It doesn't transmit anything to the IRS, it isn't a substitute for tax software or a tax professional, and it isn't tax advice. Depreciation choices carry multi-year consequences, so check the figures and consider professional help.