Form 4562: Depreciation and Section 179 Basics
Published November 5, 2026
Form 4562, Depreciation and Amortization, is where you claim depreciation and amortization for business and investment property. It is also where you make the Section 179 election, which lets you deduct certain property in the year you place it in service instead of over time. IRS: About Form 4562
Who must file it
File Form 4562 if you claim depreciation for property placed in service in 2025. You also file it if you claim a Section 179 deduction, including a carryover from an earlier year. The IRS instructions list these cases. IRS: Instructions for Form 4562 (2025)
The 2025 Section 179 limits
For tax years beginning in 2025, the maximum Section 179 deduction is $2,500,000. That limit is reduced by the amount by which the cost of Section 179 property placed in service during the year is more than $4,000,000. The limit for sport utility vehicles placed in service in 2025 is $31,300. IRS: Instructions for Form 4562 (2025)
Depreciation and MACRS
Depreciation spreads the cost of business property over the years it is used. The Modified Accelerated Cost Recovery System, called MACRS, is the current accelerated method the instructions describe. Under MACRS, assets are placed in classes that set the recovery period. Section 179 and bonus depreciation can recover more of the cost sooner. IRS: Instructions for Form 4562 (2025)
Bonus depreciation for 2025
The IRS says a 100% special depreciation allowance applies to certain qualified property acquired after January 19, 2025, and placed in service after that date. You can elect a 40% allowance for that property instead, for the first tax year ending after January 19, 2025. Property acquired before January 20, 2025 follows separate phase-down rules. Read those rules in the instructions before you claim the allowance. IRS: Instructions for Form 4562 (2025)
What each part of the form does
Part I is the Section 179 election. Part II covers the special depreciation allowance and other depreciation. Part III covers MACRS depreciation for assets placed in service in the current year. Part V covers listed property, which includes automobiles and certain other vehicles. Part VI covers amortization. If you have listed property, the form says to complete Part V before Part I. IRS: Form 4562 (2025)
Listed property and vehicles
Form 4562 also reports business or investment use of automobiles and other listed property. If a vehicle is used partly for personal driving, only the business share is depreciated. Keep a log that shows business use, since the IRS asks for these facts on the form. IRS: About Form 4562
Records to keep
- The date each asset was placed in service and its cost.
- Depreciation claimed in earlier years, and the method used.
- Business-use records for vehicles and other listed property.
- Any Section 179 carryover from a prior year.
Steps to follow
- List the business assets you bought or placed in service in 2025. For each one, note the purchase date and the date it was ready for use.
- Decide whether to expense under Section 179, use bonus depreciation, or use regular depreciation.
- Check the 2025 limits and the phase-out threshold before you make the Section 179 election.
- Complete the right parts of Form 4562, and carry the totals to your return.
Depreciation you claim now also affects the gain or loss when you sell the asset later, because the form subtracts depreciation from the basis. See Form 4797 basics for that step. IRS: About Form 4562
Depreciation also shows up on rental and home office forms. See rental income and Schedule E basics and the home office deduction.
General information, not advice for your situation.
Sources: Sources: IRS, About Form 4562 (https://www.irs.gov/forms-pubs/about-form-4562); IRS, Instructions for Form 4562 (2025) (https://www.irs.gov/instructions/i4562); IRS, Form 4562 (https://www.irs.gov/pub/irs-pdf/f4562.pdf) This is general information, not advice about your specific return.
