How to Fill Out Form 4562: Section 179, MACRS, and Amortization

Form 4562 is where you claim depreciation and amortization for business assets, and to fill it out you work through six parts in order: Part I for a Section 179 immediate expensing election, Part II for bonus depreciation, Part III for MACRS depreciation on everything else, Part IV to total those figures, Part V for vehicles and other listed property, and Part VI for amortized intangibles. The total from Part IV is the number that flows to your primary return. This guide walks through how to fill out Form 4562 line by line for the 2026 tax year, including the $2,560,000 Section 179 cap and the restored 100% bonus depreciation.

Do You Even Need to File It?

Not every taxpayer claiming depreciation attaches this form. You must file Form 4562 with your 2026 return if any of the following is true:¹

You placed depreciable property in service during 2026.
You want to make a Section 179 election, or you have a Section 179 carryover from a prior year.
You are claiming depreciation on a vehicle or other listed property, regardless of when you bought it.
You are filing any depreciation on a corporate return other than Form 1120-S.
You began amortizing costs during 2026.

If you are only continuing to depreciate non-listed property placed in service in an earlier year, you generally skip Form 4562 and report that ongoing depreciation directly on the appropriate schedule for your return type.¹

What to Pull Together First

Before opening the form, gather the cost basis for every asset, the exact date each asset was placed in service (the date it was ready and available for business use, not necessarily the purchase date), and records of business-versus-personal usage. Add your prior-year returns or depreciation schedules, because MACRS depreciation builds on what you already claimed.

For vehicles and other listed property, contemporaneous mileage logs matter more than anything else. The IRS can disallow the entire deduction if written records are missing or reconstructed after the fact.

At the top of the form, enter your name and identifying number. Sole proprietors use their Social Security number; entities use their EIN. Mistakes here delay processing.

Part I: Section 179 Expensing

Section 179 lets you deduct the full cost of qualifying business equipment in the year you place it in service instead of spreading the cost across its recovery period. For 2026, the maximum deduction is $2,560,000. That cap begins phasing out dollar-for-dollar once total qualifying purchases for the year exceed $4,090,000, and it hits zero at $6,650,000.²

Working down the lines:

Line 1: the maximum dollar limitation, $2,560,000 for 2026.
Line 2: the total cost of all Section 179 property placed in service during the year.
Line 3: the phase-out threshold, $4,090,000. Once line 2 exceeds this, your line 1 amount starts shrinking.
Line 6: a description of each asset and, in column (c), the amount you elect to expense.
Line 10: any Section 179 carryover from the prior year.
Line 13: any amount you cannot use this year and will carry into next year.

One ceiling that catches people: your Section 179 deduction cannot exceed the taxable income from all your active trades or businesses for the year.³ In a loss year, the unused portion carries forward.

Timing matters for the election itself. You have to make it on the Form 4562 filed with either your original return or a timely amended return for the year the property was placed in service. A late-filed amended return will not save it.¹

Part II: Bonus Depreciation

Part II handles the special first-year depreciation allowance. Under the One, Big, Beautiful Bill Act, qualifying property acquired after January 19, 2025, is eligible for a permanent 100% first-year deduction.⁴ The full cost of qualifying new or used property can be written off in year one.

You are not required to take 100%. You may elect a reduced 40% rate, or 60% for certain longer-production-period property and certain aircraft.⁴ A lower election makes sense when you expect higher brackets in future years and want to save deduction capacity.

Part III: MACRS Depreciation

Part III is where most of the arithmetic sits. The Modified Accelerated Cost Recovery System assigns each asset to a class based on useful life. Common recovery periods:⁵

5-year: computers, vehicles, machinery, general equipment.
7-year: office furniture, filing cabinets, safes.
27.5-year: residential rental buildings.
39-year: nonresidential real property such as offices and warehouses.

Lines 19a through 19j cover assets placed in service during the current tax year under the General Depreciation System.¹ For each row, enter the date placed in service, the depreciable basis (cost minus any Section 179 or bonus depreciation already taken), the recovery period, and the method.

Pick the Right Convention

The convention decides how much depreciation you get in year one. The default half-year convention treats the asset as if placed in service at the midpoint of the year, giving you half a year of depreciation regardless of purchase date.¹

The mid-quarter convention takes over when more than 40% of your total depreciable property basis for the year was placed in service during the last three months of the tax year.⁶ It assigns depreciation based on which quarter the asset actually went into service, which shrinks the first-year deduction on fourth-quarter buys. Real property is excluded from the 40% calculation.

Prior-Year Assets

Line 17 collects current-year depreciation for assets placed in service in earlier years. Pull that number from your existing depreciation schedule. The method and recovery period you chose when the asset first went in service stay locked for its entire life.

Part IV: Summary

Part IV pulls Parts I, II, and III together onto line 22. That figure is the depreciation total that flows to your primary return, so verify the arithmetic before signing.¹

Part V: Listed Property (Vehicles and More)

Listed property gets its own section because these assets are easy to use personally. It includes passenger automobiles weighing 6,000 pounds or less, motorcycles, pickup trucks, SUVs, and aircraft.⁷ For each item, enter the date placed in service, the business-use percentage taken from your logs, and the depreciation method.

The form asks whether you have written evidence supporting the business-use percentage. Answering no, or letting business use drop to 50% or below, costs you the accelerated methods and can force recapture of deductions already taken. Keep a contemporaneous log.

Commuting Is Not Business Use

Driving from home to your regular place of business is commuting, and commuting miles are personal miles. That stays true even if you take business calls in the car or ride with a colleague talking about work.⁸ Rolling commuting mileage into your business-use percentage is one of the fastest ways to lose the vehicle deduction in an audit.

Part VI: Amortization

Part VI is for intangibles, costs without physical form that still deliver value over time. Common examples are business start-up costs, purchased patents and copyrights, and goodwill from a business acquisition.¹

On line 42, enter a description of each cost, the date amortization begins, the Code section that governs it, and the amortization period or percentage. Section 195 start-up costs are typically amortized over 15 years after an initial deduction of up to $5,000 in the first year. Section 197 intangibles such as goodwill amortize over 15 years.⁷

What You Cannot Put on the Form

Some business purchases do not belong on Form 4562 at all. Land is the classic trap: you cannot depreciate it because it does not wear out.⁵ When you buy real estate, separate the land value from the building value and depreciate only the building. Also excluded:

Property placed in service and disposed of in the same year.
Inventory or stock in trade held for sale to customers.
Section 197 intangibles like goodwill and trademarks, which go in Part VI instead.
Certain land improvements such as swimming pools, paved parking areas, and fences, which do not qualify for Section 179.

The statute allows depreciation only for property subject to “exhaustion, wear and tear,” so if it does not degrade, it does not qualify.⁹

Attaching the Form and Keeping Records

Form 4562 does not stand alone. Attach it to your primary return: Form 1040 for sole proprietors, Form 1120 for C corporations, or Form 1065 for partnerships.¹ Tax software attaches it automatically; paper filers include it with the return mailed to their service center.

Records for depreciable property live longer than the usual three-year rule. Keep purchase invoices, depreciation schedules, and usage logs for the entire time you own the asset, plus at least three years after the year you dispose of it.¹⁰ Those records support both your ongoing depreciation and any gain calculation when the property leaves your hands.

Penalties for Getting It Wrong

Depreciation errors that produce a tax underpayment can trigger the accuracy-related penalty of 20% of the underpayment. A gross valuation misstatement, such as overstating basis by 200% or more, doubles the penalty to 40%.¹¹

Skipping the form when it is required has its own costs. Miss the Section 179 election window and you lose the election for that property.¹ Omit listed property from Part V and the IRS can disallow both the depreciation deduction and the business-use percentage.

1
Internal Revenue Service. Instructions for Form 4562 (2025)
2
Internal Revenue Service. Rev. Proc. 2025-32
3
Office of the Law Revision Counsel. 26 USC 179 – Election to Expense Certain Depreciable Business Assets
4
Internal Revenue Service. Treasury, IRS Issue Guidance on the Additional First Year Depreciation Deduction Amended as Part of the One, Big, Beautiful Bill
5
Internal Revenue Service. Publication 946 (2025), How To Depreciate Property
6
eCFR. 26 CFR 1.168(d)-1 Applicable Conventions – Half-Year and Mid-Quarter Conventions
7
Internal Revenue Service. 2025 Instructions for Form 4562 – Depreciation and Amortization
8
Internal Revenue Service. Publication 463 (2025), Travel, Gift, and Car Expenses
9
Office of the Law Revision Counsel. 26 USC 167 – Depreciation
10
Internal Revenue Service. How Long Should I Keep Records
11
Office of the Law Revision Counsel. 26 USC 6662 – Imposition of Accuracy-Related Penalty on Underpayments