Form 4562, Depreciation and Amortization

This form is used by individuals, businesses, and corporations to report depreciation and amortization deductions.

Depreciation and amortization are tax deduction methods used to account for the cost of long-term business assets. Depreciation is for tangible assets like buildings, machinery, equipment, furniture, and vehicles, while amortization is for intangible assets such as patents, copyrights, and business start-up costs.

  • Part I - Election to Expense Certain Property Under Section 179: Section 179 of the Internal Revenue Code allows businesses to deduct the full purchase price of qualifying equipment and software purchased during the tax year.
  • Part II - Special Depreciation Allowance and Other Depreciation: Claim special depreciation allowance for qualified property, as well as depreciation on any property placed in service during the current year.
  • Part III - MACRS Depreciation: MACRS (Modified Accelerated Cost Recovery System) is the primary method of depreciation used for federal income tax purposes. List property that you started depreciating in earlier years, or that doesn’t qualify for the special depreciation allowance.
  • Part IV - Summary: Reports the totals from the previous parts and carries these totals to other relevant forms, such as Schedule C or Form 1040.
  • Part V - Listed Property: "Listed property"  includes certain types of vehicles and equipment used for both business and personal purposes. There are special rules and limits for depreciating these items.