Instructions for Filling Out Form 4562

Instructions for Filling Out Form 4562

Written by 
Pilot Team
August 7, 2023
Instructions for Filling Out Form 4562

This article offers a concise overview of Form 4562, which is used to report depreciation and amortization on a taxpayer's federal tax return. The form covers various aspects, including electing the Section 179 expense deduction, special depreciation allowance, MACRS depreciation, listed property, and amortization. In addition, we provide a step-by-step guide on how to fill out the form, ensuring a smooth and accurate filing process.

What is Form 4562?

Form 4562 is a tax document used to report depreciation and amortization, including information on listed property. Its primary purpose is to allow taxpayers to calculate and report property depreciation for the current tax year, claim the Section 179 expense deduction, and provide information on the business or investment use of automobiles and other listed property. The form consists of six key components: Part I - Election to expense certain property under Section 179; Part II - Special depreciation allowance and other depreciation; Part III - MACRS depreciation; Part IV - Summary of total depreciation and amortization; Part V - Listed property; and Part VI - Amortization of certain costs over a fixed period.

Who Must File Form 4562?

Form 4562 must be filed by taxpayers who are claiming any of the following: depreciation for property placed in service during the 2023 tax year; a Section 179 expense deduction (which may include a carryover from a previous year); depreciation on any vehicle or other listed property, regardless of when it was placed in service; a deduction for any vehicle reported on a form other than Schedule C (Form 1040), Profit or Loss From Business; any depreciation on a corporate income tax return (other than Form 1120-S); and amortization of costs that begins during the 2023 tax year.

Form 4562 Tax Filing Deadlines and Due Dates

  • Individuals: April 15
  • Most businesses: March 15 or April 15, depending on their structure

Form 4562 Late Payment Penalty

To determine the specific penalty information, taxpayers should refer to the instructions for the applicable tax return, such as Form 1040 for individuals or Form 1120 for corporations, or consult IRS guidance on penalties for late payment.

Step-by-Step Instructions for Form 4562

Step by Step Instructions for Filling Out Form 4562:

  1. Part I - Election To Expense Certain Property Under Section 179:
    • Determine the total cost of section 179 property placed in service during the tax year.
    • Calculate the maximum section 179 expense deduction for the year.
    • Allocate the deduction among the properties and enter the information in the form.
  2. Part II - Special Depreciation Allowance and Other Depreciation:
    • Identify qualified property eligible for the special depreciation allowance.
    • Calculate the allowance based on the property's cost and business use percentage.
    • Enter the depreciation deduction for other properties not covered by section 179 or the special allowance.
  3. Part III - MACRS Depreciation:
    • List properties depreciated under the Modified Accelerated Cost Recovery System (MACRS).
    • Determine the appropriate recovery period, method, and convention for each property.
    • Calculate and enter the depreciation deduction for each property.
  4. Part IV - Summary:
    • Summarize the total depreciation and section 179 expense deduction.
    • Include any adjustments for the uniform capitalization rules if applicable.
  5. Part V - Listed Property:
    • Provide detailed information about listed property, including vehicles and computers.
    • Calculate the business use percentage and depreciation deduction for each listed property.
  6. Part VI - Amortization:
    • List costs that are being amortized, such as organizational expenses or certain intangibles.
    • Determine the amortization period and amount for each cost.
    • Enter the amortization deduction for the tax year.

How to Submit Form 4562

To submit Form 4562, complete the form according to the detailed instructions provided for each part and section, including information on depreciation and amortization. Once completed, attach it to the taxpayer's federal tax return and submit it following the guidelines for the specific tax return being filed.

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