How to Fill Out Form 4562: Depreciation and Amortization

Form 4562 is the IRS form you attach to your return to claim depreciation on business assets and amortization of intangibles, and to fill it out you work through its six parts in order: Section 179 expensing, bonus depreciation, MACRS, the summary total, listed property, and amortization. The number that lands on line 22 is what you carry to Schedule C, Schedule E, or the applicable line of your business return. For property acquired after January 19, 2025, bonus depreciation is back to 100%, and the Section 179 limit for 2025 is $2,500,000 (roughly $2,560,000 for 2026 after inflation adjustment).

Do You Actually Need to File It

Form 4562 is required for the year only if one of these applies:¹

You placed depreciable property in service during the tax year.
You are claiming a Section 179 deduction, including a carryover from a prior year.
You are depreciating any listed property, regardless of when it went into service.
You are deducting a vehicle on a form other than Schedule C.
You are claiming depreciation on a corporate return other than Form 1120-S.
You began amortizing costs during the year.

If your only depreciation this year is continuing MACRS on older assets and none of it involves listed property, skip the form and report the deduction directly on the depreciation line of your return. The same shortcut works for amortization begun in a prior year: report it on “Other Deductions” or “Other Expenses” if you have no other reason to file Form 4562.²

One preliminary decision affects whether an item even reaches the form. Under the de minimis safe harbor election, you can expense tangible property costing up to $2,500 per invoice or item ($5,000 if you have an applicable financial statement). The election is made annually on your return and keeps small purchases off Form 4562 entirely.³

What to Have in Front of You

Every line on Form 4562 draws on the same handful of facts per asset. Pull these together before you start:

Cost basis: what you paid, including sales tax, shipping, and installation — the total to get the asset in service.
Date placed in service: the date the asset was ready and available for its intended business use, not necessarily the purchase date.
Business-use percentage: only the business share of an asset’s use is deductible.¹
Invoices, receipts, and (for vehicles) a contemporaneous mileage log recording business miles, commuting miles, and total miles.⁴

Before you assume a cost is depreciable, decide whether it is an improvement or a repair. Under the tangible property regulations, a cost is an improvement (capitalize and depreciate) if it is a betterment, a restoration, or an adaptation to a new use. Routine maintenance you expect to perform more than once during the asset’s class life — or, for buildings, more than once in the ten years after the building is placed in service — is a currently deductible repair.³

The Header

At the top, enter the name shown on your tax return, the business or activity to which the form relates, and your identifying number.⁵ Sole proprietors use their SSN; corporations and partnerships use their EIN. If you run more than one business, file a separate Form 4562 for each activity.

Part I: Section 179 Expensing

Part I is where you elect to write off the full cost of qualifying property in the year you place it in service, instead of spreading the deduction across the recovery period.⁶ Qualifying property covers tangible personal property such as machinery, equipment, and off-the-shelf software, plus certain improvements to nonresidential real property (roofs, HVAC, fire alarms, security systems).⁷

Work down the lines:

Line 1: the maximum dollar limitation. For 2025 this is $2,500,000; the 2026 figure is approximately $2,560,000 after inflation adjustment.²
Line 2: the total cost of all Section 179 property placed in service during the year — the full cost, not just what you plan to expense.
Line 3: the investment threshold. $4,000,000 for 2025, approximately $4,090,000 for 2026.²
Lines 4–5: if line 2 exceeds line 3, these lines calculate the dollar-for-dollar reduction in your maximum deduction.
Lines 6–7: enter the elected cost — the amount you actually choose to expense — in column (c) of line 6 for non-listed property, and on line 7 for listed property.²
Line 11: the business income limit. The Section 179 deduction cannot exceed taxable income from the active conduct of your business.
Line 12: the allowable Section 179 deduction for the year.
Line 13: any disallowed amount, which carries forward.⁶

SUVs have their own cap. For 2025 the maximum Section 179 deduction on a sport utility vehicle is $31,300, whatever the vehicle actually cost.²

Part II: Bonus Depreciation

Part II is taken after Section 179 and before standard MACRS. Under the One, Big, Beautiful Bill Act, qualified property acquired after January 19, 2025, is eligible for a permanent 100% bonus depreciation deduction, letting you write off the remaining cost in the year you place the asset in service.⁸ Qualified property is generally new or used tangible property with a recovery period of 20 years or less.

Line 14: bonus depreciation for qualified property other than listed property.⁹
Line 15: property you elect to depreciate under the alternative depreciation system outside MACRS.
Line 16: other depreciation, including any property still on the older Accelerated Cost Recovery System.

For property acquired before January 20, 2025, the bonus percentage depends on the placed-in-service date. For the first tax year ending after January 19, 2025, you may elect 40% instead of 100%.⁸

Part III: MACRS Depreciation

Part III handles the standard method for most business property. MACRS assigns each asset to a recovery class with a fixed schedule of annual percentages.¹⁰

Recovery Classes You’ll Likely Use

5-year: automobiles, light trucks, copiers, duplicating equipment, appliances and carpets in rental real estate, certain energy property.¹⁰
7-year: office furniture and equipment.
27.5-year: residential rental buildings.
39-year: nonresidential (commercial) real property.⁵

Which Convention Applies

The convention sets how much depreciation you claim in the first and last years:¹¹

Half-year: the default for most personal property. Treats the asset as placed in service at midyear, so year one gets half a year regardless of purchase date.
Mid-quarter: required if more than 40% of the total depreciable basis of personal property placed in service that year falls in the last three months. When it applies, it replaces the half-year convention for all such property placed in service that year.⁹
Mid-month: used for residential rental property, nonresidential real property, and railroad gradings or tunnel bores. Treats the asset as placed in service at the midpoint of the month it went into use.⁹

Line 17 and Lines 19a–19j

Line 17 is for combined depreciation on all MACRS assets placed in service in prior tax years. You don’t list them individually; you enter the total current-year deduction for the group.¹⁰

Lines 19a through 19j cover assets placed in service during the current tax year, one line per recovery class from 3-year through nonresidential real property.⁵ For each line, enter the depreciable basis (cost times business-use percentage), the recovery period, the convention, the method, and the calculated deduction. Listed property does not go here; it goes in Part V.

Part IV: The Summary

Part IV pulls everything into one total. Line 21 brings in the Part V listed-property total, and line 22 adds the Section 179 deduction from line 12, the bonus and other depreciation from lines 14 through 16, prior-year MACRS from line 17, current-year MACRS from lines 19 and 20, and the listed-property amount from line 21.⁵

The line 22 total is what you transfer to your main return: Schedule C (line 13) for sole proprietors, Schedule E for rental property, or the applicable line of Form 1065, 1120, or 1120-S.

Part V: Listed Property

Listed property gets its own section because these assets often mix business and personal use. The category includes passenger automobiles weighing 6,000 pounds or less, other vehicles whose nature invites personal use (motorcycles, pickup trucks, aircraft), and property used for entertainment or recreation such as cameras and audio equipment.¹⁰

Mileage on Lines 30–36

For each vehicle you claim, report total miles, business miles, commuting miles, and other personal miles. The IRS uses these figures to test whether your claimed business-use percentage is reasonable.¹⁰ Claiming 100% business use on a vehicle, especially if it’s your only vehicle, draws attention.

Luxury Auto Caps

Passenger automobiles are subject to annual depreciation caps that include any Section 179 or bonus amount. For vehicles placed in service in 2025, the first-year cap is $20,200 with bonus depreciation or $12,200 without. The second-year cap is $19,600, the third year is $11,800, and each year after that is $7,060.² These figures are adjusted annually for inflation.

When Business Use Drops to 50% or Below

If a listed property asset’s business use falls to 50% or less during any year of its recovery period, two things follow. You must switch to straight-line depreciation for that asset going forward.¹⁰ And you must recapture — add back to income — the excess depreciation claimed in earlier years when business use was above 50%, including any Section 179 and bonus amounts.

Part VI: Amortization

Part VI is for intangibles. The main category is Section 197 intangibles, amortized ratably over 15 years beginning in the month the asset is acquired.¹² Section 197 covers:

Goodwill and going-concern value
Customer lists and other customer-based intangibles
Patents, copyrights, formulas, and similar intellectual property
Government-granted licenses and permits
Franchises, trademarks, and trade names
Covenants not to compete entered into as part of a business acquisition¹²

Start-up costs under Section 195 work differently. You can deduct up to $5,000 of start-up costs in the year business begins, reduced dollar-for-dollar once total start-up costs exceed $50,000. Any remaining balance is amortized over 180 months starting with the month the business opens.¹³

For each amortizable cost, enter a description, the date amortization begins, the Code section, the amortization period, and the current-year deduction. Line 44 shows the year’s total amortization, which flows into your return.⁵

Attaching and Filing the Form

Form 4562 is never filed on its own. Attach it to your primary federal return — Form 1040 for individuals, Form 1065 for partnerships, or Form 1120 or 1120-S for corporations.⁵ If you run multiple businesses, attach a separate Form 4562 for each activity.

Tax software handles electronic transmission automatically when you e-file. If you file on paper, follow the assembly sequence in the instructions and place the form behind your main schedules. Keep your purchase records, mileage logs, and prior-year depreciation schedules organized: if the IRS questions a recovery period, a business-use percentage, or any other figure on the form, those are what you’ll be asked to produce.

1
Internal Revenue Service. Instructions for Form 4562 – Introductory Material
2
Internal Revenue Service. Instructions for Form 4562
3
Internal Revenue Service. Tangible Property Final Regulations
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Internal Revenue Service. Publication 463, Travel, Gift, and Car Expenses
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Internal Revenue Service. Form 4562 – Depreciation and Amortization
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Internal Revenue Service. Publication 946, How To Depreciate Property – Section: Electing the Section 179 Deduction
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Internal Revenue Service. Depreciation Expense Helps Business Owners Keep More Money
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Internal Revenue Service. Treasury, IRS Issue Guidance on the Additional First Year Depreciation Deduction Amended as Part of the One Big Beautiful Bill
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Internal Revenue Service. Publication 946, How To Depreciate Property
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Internal Revenue Service. 2025 Instructions for Form 4562 – Depreciation and Amortization
11
Office of the Law Revision Counsel. 26 U.S. Code 168 – Accelerated Cost Recovery System
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Office of the Law Revision Counsel. 26 U.S. Code 197 – Amortization of Goodwill and Certain Other Intangibles
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Office of the Law Revision Counsel. 26 USC 195 – Start-Up Expenditures