How to Claim the IRS Section 179 Deduction on Form 4562

To claim the Section 179 deduction on Form 4562, complete Part I of the form, attach it to your business tax return for the year the property was placed in service, and make the election on that original return. For the 2026 tax year, the maximum deduction is $2,560,000, and it begins to phase out once total qualifying purchases exceed $4,090,000.¹ If you’re expensing a vehicle or other listed property, fill out Part V first and carry the number forward.

Before You Fill Out the Form

Three things have to be true about every asset you plan to expense.

It has to be qualifying property. Section 179 covers tangible personal property bought for use in an active trade or business: machinery, manufacturing equipment, office furniture, computers, tools, and off-the-shelf software available to the general public under a standard license. New and used property both qualify, as long as the asset is new to your business.² Certain improvements to the interior of a nonresidential building — qualified improvement property, or QIP — also count, though enlargements, elevators, escalators, and changes to the internal structural framework are excluded.³ Property bought from certain related persons (spouse, parents, grandparents, children, grandchildren, controlled group members) does not qualify.

It has to be placed in service during the tax year. Placed in service means set up and ready for its intended use, not just ordered or paid for. Equipment sitting in a warehouse on December 31 doesn’t count.

It has to be used more than 50% for business in the year you place it in service. Mixed-use assets are only eligible up to the business-use percentage: an asset used 75% for business allows you to expense 75% of the cost.²

Any business structure can make the election: sole proprietorships, partnerships, S corporations, C corporations, and LLCs. Sole proprietors attach Form 4562 to Form 1040, partnerships to Form 1065, and corporations to Form 1120 or 1120-S.⁴ Married taxpayers filing separately split the dollar limitation, 50/50 by default.

Filling Out Part I Line by Line

Download Form 4562 (Depreciation and Amortization) from irs.gov.⁵ Part I is where the Section 179 election lives.

Line 1 — Maximum dollar limitation. For 2026 returns, enter $2,560,000.
Line 2 — Total cost of Section 179 property placed in service. Include every qualifying asset, including anything a jointly filing spouse placed in service.
Line 3 — Phase-out threshold. For 2026, enter $4,090,000.
Line 4 — Reduction in limitation. If line 2 exceeds line 3, enter the difference. Otherwise enter zero.
Line 5 — Dollar limitation for the year. Line 1 minus line 4. If zero, you cannot expense any property this year — skip to line 12.
Line 6 — Property list. List each qualifying asset except listed property. Column (a) gets a brief description, column (b) the cost attributable to business use, and column (c) the amount you elect to expense. You don’t have to expense the full cost; any remainder can be depreciated normally.
Line 7 — Listed property. Enter the Section 179 amount for any listed property, pulled from line 29 in Part V.
Line 10 — Carryover from prior years. Any disallowed Section 179 amount carried forward from a previous return.
Line 11 — Business income limitation. The deduction cannot exceed your net taxable income from active business operations.⁶
Line 12 — Section 179 deduction claimed. The lesser of your elected cost and your taxable income limit.
Line 13 — Carryover to next year. Any amount that exceeds the taxable income limit; it carries forward with no expiration date.⁷

These line references follow the 2025 form instructions.⁶ The 2026 form may adjust the pre-printed amounts on lines 1 and 3, but the structure stays the same.

A note on the phase-out. It works dollar for dollar: your $2,560,000 allowance shrinks by one dollar for every dollar of qualifying purchases over $4,090,000. A business that spends $6,650,000 or more on qualifying property in 2026 loses the deduction entirely.

Vehicles and Other Listed Property

If you’re expensing a vehicle, do not put it on line 6. Vehicles are listed property, and listed property runs through Part V of Form 4562 first. The Section 179 amount from line 29 of Part V is what carries up to line 7 of Part I.⁸

The number you can enter for a vehicle depends on its gross vehicle weight rating (GVWR):

Passenger vehicles under 6,000 pounds GVWR fall under the Section 280F caps. For vehicles placed in service in 2026 where bonus depreciation applies, the first-year depreciation limit (including any Section 179 amount) is $20,300; without bonus depreciation, $12,300.⁹
SUVs above 6,000 pounds but no more than 14,000 pounds GVWR have a separate Section 179 cap of $32,000 for 2026.¹
Trucks, vans, and other vehicles above 14,000 pounds GVWR are not passenger automobiles for tax purposes and are eligible for the full Section 179 amount up to the general $2,560,000 limit.

Attaching the Form and Timing the Election

Attach the completed Form 4562 to your business tax return for the year the property was placed in service.¹⁰

The election must be made on the original return, whether or not you file that return on time. You cannot make the election for the first time on an amended return filed after the due date, including extensions. One narrow exception: if you filed your original return on time without making the election, you can still make it on an amended return filed within six months of the original due date, not counting extensions.¹¹

Once made, the election can only be revoked with IRS consent, which the agency grants only in extraordinary circumstances. You apply by writing to the Commissioner of Internal Revenue in Washington, D.C., explaining the year, the property, and the reasons. An approved revocation is permanent for that property.¹²

What to Keep, and What Can Come Back

Before you fill out the form, gather purchase receipts, invoices, and shipping records for every asset. You need a description, the date placed in service, and the total cost. For mixed-use assets, keep a log documenting business-use percentage — mileage logs for vehicles, usage records for equipment. Without records, the IRS can disallow the deduction in an audit.

The 50% business-use threshold is not just a first-year test. If business use drops to 50% or below in any later year, you have to recapture the excess: the difference between what you deducted under Section 179 and what you would have deducted under the alternative depreciation system gets added back to income for that later year.¹³ Keep your records for as long as the asset is in service plus three years after the return on which you last claim depreciation or dispose of it. A mileage log from 2026 may still matter on a 2030 audit.

State Returns May Not Follow

Claiming Section 179 on Form 4562 handles your federal return. It does not automatically handle your state return. Several states cap their Section 179 allowance well below the federal amount: California, Arkansas, Hawaii, Indiana, Kentucky, Maryland, New Hampshire, and New Jersey each cap it at $25,000. Georgia allows $250,000, Florida $128,000, Arizona $120,000, and Minnesota $196,000 with a five-year addback and subtraction mechanism. Check your state’s current conformity rules before assuming the full federal deduction flows through.

1
Internal Revenue Service. Rev. Proc. 2025-32
2
Office of the Law Revision Counsel. 26 USC 179 – Election to Expense Certain Depreciable Business Assets
3
Internal Revenue Service. Publication 946, How To Depreciate Property
4
Internal Revenue Service. Instructions for Form 4562
5
Internal Revenue Service. About Form 4562, Depreciation and Amortization
6
Internal Revenue Service. Instructions for Form 4562 – Section: Part I, Election To Expense Certain Property Under Section 179
7
eCFR. 26 CFR 1.179-3 – Carryover of Disallowed Deduction
8
Internal Revenue Service. Instructions for Form 4562 – Section: Part I, Line 6
9
Internal Revenue Service. Rev. Proc. 2026-15
10
Internal Revenue Service. Form 4562 – Depreciation and Amortization
11
Internal Revenue Service. Rules for Making a Section 179 Election
12
eCFR. 26 CFR 1.179-5 – Time and Manner of Making Election
13
Office of the Law Revision Counsel. 26 USC 280F – Limitation on Depreciation for Luxury Automobiles and Limitation Where Certain Property Used for Personal Purposes