What Is Form 4562? Depreciation and Amortization

What Is Form 4562?

Form 4562, Depreciation and Amortization, is used to claim depreciation and amortization deductions, make a Section 179 expense election, report certain first-year depreciation, and provide information about automobiles and other listed property. It usually supports another return or schedule rather than functioning as a standalone tax return.

The form converts a fixed-asset schedule into tax-return amounts. It does not mean every asset purchase is immediately deductible, and it cannot replace records showing cost, placed-in-service date, business use, recovery period, method, convention, and prior depreciation.

When Form 4562 is generally required

A taxpayer generally files Form 4562 for a return that includes:

• Depreciation for property placed in service during the tax year
• A Section 179 deduction or carryover
• Special depreciation allowance or other first-year deduction
• Depreciation on listed property, regardless of when placed in service
• Amortization beginning during the year
• Certain depreciation reported through an estate or trust
• A vehicle or other listed-property deduction requiring Part V information

A separate Form 4562 may be needed for each business or activity. Continuing depreciation on older property may sometimes flow from the supporting schedule without a new Form 4562, but listed property and other instructions can still require the form.

The main parts of Form 4562

Part I reports the Section 179 election. Part II reports special depreciation allowance and certain other depreciation. Part III reports MACRS depreciation. Part IV summarizes amounts. Part V addresses listed property and vehicle-use information. Part VI reports amortization.

These sections reflect different rules. Section 179 is elective and subject to dollar, investment, business-income, entity, and taxpayer limitations. Bonus depreciation is a separate first-year rule. Regular MACRS depreciation spreads basis over a recovery period. Amortization applies to certain intangible costs.

A simple Form 4562 example

Suppose a consulting business buys qualifying computer equipment for $12,000 and places it in service on September 1. Business use is 100%. The owner must decide, based on eligibility and the full return, whether to elect Section 179, use any available bonus depreciation, or claim regular depreciation.

The placed-in-service date is not always the purchase or payment date. It is generally when the asset is ready and available for its intended use. The business may not claim bonus and regular depreciation on the same basis already expensed under Section 179.

Cost basis and depreciation records

Depreciable basis commonly starts with purchase price plus costs necessary to acquire and prepare the property for use. Land is not depreciable and must be separated from a building's basis. Trade-ins, rebates, credits, casualty adjustments, personal-to-business conversions, improvements, and inherited or gifted property can require different basis calculations.

A reliable fixed-asset schedule should retain:

• Asset description and location
• Acquisition and placed-in-service dates
• Original and adjusted basis
• Business-use percentage
• Recovery period, method, and convention
• Section 179 and bonus amounts
• Federal and California accumulated depreciation
• Disposition date and proceeds

Vehicles and listed property

Passenger automobiles and other listed property have special substantiation and deduction rules. Form 4562 may ask for business mileage, commuting mileage, total mileage, vehicle availability, and written evidence. Commuting between home and a regular workplace is generally personal, even when the taxpayer conducts business calls during the drive.

Business use of 50% or less can limit Section 179 and accelerated methods. A later decline in business use can trigger recapture. Contemporaneous mileage logs, calendars, repair records, and odometer readings are more reliable than a year-end estimate.

Form 4562 and a pass-through entity

Partnerships and S corporations generally make and report entity-level depreciation elections for entity property. Certain items, including Section 179 deductions, pass through separately on Schedule K-1 and may face additional owner-level limits. An owner should not enter the entity's full asset cost again on a personal Form 4562.

Rental properties, multiple Schedule C businesses, farms, and pass-through interests also require activity-by-activity coordination. Depreciation may be limited by basis, at-risk, passive activity, or business-income rules even when Form 4562 calculates an amount.

Federal and California treatment

California generally does not conform to every federal accelerated-depreciation provision. It generally does not conform to federal bonus depreciation and maintains different Section 179 limits. Consequently, the same asset may have separate federal and California basis, current depreciation, and accumulated depreciation from its first year through disposition.

California adjustments may flow through Schedule CA, Form 100, Form 100S, Form 565, or Form 568 depending on the taxpayer and activity. A federal Form 4562 should not be treated as a complete California depreciation schedule.

Common Form 4562 mistakes

• Using the purchase date instead of the placed-in-service date
• Depreciating land or failing to allocate a real-estate purchase
• Claiming Section 179, bonus, and regular depreciation on the same basis
• Omitting prior depreciation when changing software or preparers
• Treating repairs and capital improvements the same
• Using an unsupported vehicle business-use percentage
• Ignoring recapture when business use falls or an asset is sold
• Copying federal depreciation into California without adjustments
• Disposing of an asset in the books without computing tax gain or loss

Frequently asked questions

Related terms

• Depreciation
• Bonus Depreciation vs. Section 179
• Capital Expenditure
• Repairs vs. Improvements
• Rental Property Depreciation

Official sources

• IRS — About Form 4562
• IRS — 2025 Instructions for Form 4562
• IRS — Publication 946, How To Depreciate Property
• IRS — Bonus depreciation frequently asked questions
• California FTB — Depreciation and amortization

The definitions and examples on this page are for informational purposes only and do not constitute tax advice. Tax laws change frequently and individual circumstances vary. Consult a qualified tax professional before making decisions based on this content.