What Is Form 4562: Depreciation and Amortization?
Let me explain Form 4562 directly: it's the IRS form you use to claim deductions for depreciating or amortizing your assets, to expense certain property under specific rules, and to report how you're using automobiles or other listed property in your business or investments.
Key Takeaways on Form 4562
You need to know that IRS Form 4562 lets you deduct for depreciating tangible or intangible property—think buildings, machinery, or patents. Remember, land doesn't depreciate, so you can't report it here. When you buy property for your business, the IRS won't let you deduct the full cost right away; instead, you spread it out over years via depreciation, and this form is where you report it. You can claim for tangible assets like a building or intangible ones like a patent, but Section 179 property has limits—it must be actively used in business, not for investments, hotels, or mostly abroad.
Understanding Form 4562: Depreciation and Amortization
If you're buying property for your business, understand that the IRS requires you to deduct costs gradually through depreciation, which you report on Form 4562. This applies to both tangible items and intangibles. For Section 179, it's about property you actively use in business, excluding things like investment holdings or foreign-based assets.
Who Can File Form 4562: Depreciation and Amortization?
You must file Form 4562 if you're claiming depreciation for new property this tax year, a Section 179 deduction including carryovers, depreciation on vehicles or listed property no matter when acquired, vehicle deductions not on Schedule C, corporate depreciation outside Form 1120-S, or amortization starting this year. File a separate form for each business or activity—don't combine them. You don't have to attach detailed records, but keep them for your calculations. Note, this isn't for employees deducting job-related vehicle expenses; that ended with the Tax Cuts and Jobs Act.
How to File Form 4562: Depreciation and Amortization
Start by including your name, taxpayer ID, and the business activity. Part I is for electing to expense under Section 179, covering tangible personal property like equipment or qualified real property. Part II handles special depreciation allowances and other types, but skip listed property here. Part III is for MACRS depreciation, where you assign assets to classes with set periods. If you run out of space, add sheets, but complete only one full Part I for your Section 179 deduction. Download the form from the IRS to get started.
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