Form 4562 Instructions 2026: Section 179, 100% Bonus Depreciation, and MACRS, Part by Part

Form 4562, Depreciation and Amortization, is the IRS form that carries every first-year equipment write-off to your return: the Section 179 election in Part I (line 12, capped at $2,560,000 for tax year 2026 and $2,500,000 for 2025), the 100% bonus depreciation allowance in Part II (line 14), regular MACRS in Part III (lines 17 through 20), listed property and vehicles in Part V, and amortization in Part VI. Line 22 totals Parts I through V and flows to Schedule C line 13 for a sole proprietor, line 16a of Form 1065 for a partnership, or line 14 of Form 1120-S for an S corporation. You need the form only in a year when you place an asset in service, elect Section 179, depreciate a vehicle or other listed property, or start amortizing a cost.

This line map was checked against the 2025 revision of Form 4562 (dated October 9, 2025) and the 2025 Instructions for Form 4562 (posted March 30, 2026) on September 22, 2026. Those are the current forms for 2025 returns filed on extension this fall. The 2026 revision, expected in early 2027, will carry the tax-year-2026 amounts shown here from Rev. Proc. 2025-32 and Rev. Proc. 2026-15; line numbers are stated as they appear on the 2025 form.

Save this cheat sheet — key numbers in one image.

Who Must File Form 4562?

The Instructions for Form 4562 require the form when you claim any of the following:

• Depreciation for property placed in service during the tax year
• A Section 179 expense deduction, including 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
• Any depreciation on a corporate income tax return other than Form 1120-S
• Amortization of costs that begins during the tax year

The mirror image matters just as much. If every asset you own was placed in service in an earlier year, none of it is listed property, and you are not electing Section 179, you do not attach a new Form 4562; the Schedule C instructions for line 13 say so directly. Items expensed under the $2,500 de minimis safe harbor never touch the form. File a separate Form 4562 for each business or activity that needs one, but complete Part I only once. Which write-off method to choose is covered in our Section 179 and depreciation guide; this post is about where each choice lands on the form.

The Order on the Form: Section 179 First, Bonus Second, MACRS on What Is Left

The instructions for line 14 state the sequence: the special depreciation allowance is "an additional deduction you can take after any section 179 expense deduction and before you figure regular depreciation under MACRS." Part I reduces the asset's basis by the elected Section 179 cost, Part II applies the bonus percentage to what remains, and Part III depreciates only the leftover. One exception sits at the top of the form: if you have any listed property, the note under Part I tells you to complete Part V first, because vehicle amounts enter Part I through line 7.

See Which Lines Your Purchase Fills

Part I: The Section 179 Election, Lines 1 Through 13

Part I turns the Section 179 election into a deduction in three steps: the dollar limitation (lines 1 through 5), the elected cost (lines 6 through 9), and the business income limitation (lines 10 through 13).

Line 11 is the line that bites. For an individual, business income means the taxable income from every trade or business you actively conducted, computed without the Section 179 deduction, the one-half of self-employment tax deduction, or any net operating loss deduction, plus all W-2 wages (Form 1040, line 1a); spouses filing jointly combine both incomes (Treasury Regulation Section 1.179-2(c)). Whatever line 11 disallows carries forward on line 13 indefinitely, and you cannot also claim bonus on the disallowed amount, because the election already reduced the asset's basis.

Two entity rules change how Part I is used. A partnership or S corporation fills in Part I but does not include line 12 on line 22; the deduction passes through on Schedule K (line 12 of Form 1065, line 11 of Form 1120-S) and each owner's K-1, and the owner applies their own line 11 limit on their own Form 4562. And vehicles never appear on line 6 directly: a heavy SUV, defined in IRC Section 179(b)(5) as a four-wheeled passenger vehicle rated above 6,000 pounds and not more than 14,000 pounds gross vehicle weight, is capped at $32,000 of Section 179 for 2026 ($31,300 for 2025), entered in column (i) of line 26 in Part V and carried to line 7.

Part II: Bonus Depreciation on Line 14

Line 14 is the special depreciation allowance for qualified property, other than listed property, placed in service during the tax year. Under IRC Section 168(k) as amended by the One Big Beautiful Bill Act (P.L. 119-21), the allowance is 100% of depreciable basis for qualified property acquired after January 19, 2025: broadly, MACRS property with a recovery period of 20 years or less, off-the-shelf computer software, and qualified improvement property, new or used, as long as it did not come from a related party. Property acquired before January 20, 2025 and placed in service in 2025 stays on the old phase-down at 40%. The math is basis times percentage, where basis is the business-use cost minus any Section 179 elected in Part I, so line 14 usually equals whatever Part I left behind and Part III stays empty for most equipment bought in 2026.

Electing out. You can elect, for any class of property, not to claim the allowance for all property in that class placed in service during the year, by attaching a statement to a timely filed return (including extensions) that names the class and states that no special depreciation allowance is claimed for it. Treasury Regulation Section 1.168(k)-2 governs the mechanics, and each person owning the property (the partnership, the S corporation) makes its own election. Leaving line 14 blank without the statement does not opt you out: basis is reduced by the depreciation allowable whether or not you claimed it, a rule our depreciation recapture guide explains from the sale side.

Line 15 covers property under a Section 168(f)(1) election and line 16 other depreciation, including computer software amortized straight-line over 36 months. OBBBA also added Section 168(n), a 100% allowance for qualified production property (nonresidential real property used as an integral part of manufacturing or similar production, placed in service after July 4, 2025), claimed in Part II by designating the basis so treated.

Part III: MACRS Depreciation, Lines 17 Through 20

Part III covers the Modified Accelerated Cost Recovery System for property that did not get fully expensed in Parts I and II. Line 17 is a single total for MACRS deductions on assets placed in service in earlier tax years, and line 18 is a checkbox for electing general asset accounts.

Section B, lines 19a through 19j, is for assets placed in service this year under the General Depreciation System, one line per class: 3-year (19a), 5-year (19b: computers, cars, light trucks, office machinery), 7-year (19c: office furniture, most manufacturing equipment), 10-year (19d), 15-year (19e: land improvements, qualified improvement property), 20-year (19f), 25-year (19g), 50-year (19h), residential rental property at 27.5 years (19i), and nonresidential real property at 39 years (19j). Each row takes the basis after Section 179 and bonus (column c), the recovery period (d), the convention (e), the method (f), and the deduction (g); real property also needs the month and year placed in service (b) and uses straight line with the mid-month convention.

Half-year versus mid-quarter. Personal property normally uses the half-year convention, which treats everything as placed in service at mid-year. If the total depreciable basis of MACRS property placed in service during the last three months of your tax year exceeds 40% of the total basis placed in service during the whole year, the mid-quarter convention applies to all of it (IRC Section 168(d)(3)); residential rental and nonresidential real property are excluded from the test. Bonus-depreciated basis never reaches Part III, so a year in which everything took 100% bonus rarely trips the 40% rule.

Table A in the instructions gives the half-year percentages that produce column (g). For the two classes small businesses use most:

Section C, lines 20a through 20e, is the Alternative Depreciation System: class life, 12-year, 30-year, 40-year, and 50-year straight-line rows. ADS is mandatory for listed property used 50% or less for business (which is why those assets sit in Part V rather than here) and for certain tax-exempt-use property, and available to anyone who elects it.

Part IV: Line 22 and Where It Goes on Your Return

Line 21 pulls listed-property depreciation in from line 28. Line 22 adds line 12, lines 14 through 17, column (g) of lines 19 and 20, and line 21, and the form tells you to enter the total "on the appropriate lines of your return." Those lines, checked against the 2025 forms:

Part V: Listed Property and Vehicles, Lines 24 Through 41

Listed property, per the instructions, includes passenger automobiles weighing 6,000 pounds or less; other transportation property that lends itself to personal use, such as motorcycles, pickup trucks, SUVs, and aircraft; and photographic, communication, and video recording equipment, except when that equipment is used exclusively in your trade or business or at your regular business establishment. Computers placed in service after 2017 are no longer listed property. The note under Part I sends all listed property to Part V, never to Parts II or III.

Section A, lines 24 through 29. Lines 24a and 24b ask whether you have evidence supporting the business-use percentage and whether it is written (a mileage log is the expected answer); line 24c, new for 2025, asks about aircraft. Line 25 is the bonus allowance for listed property used more than 50% in a qualified business use. Line 26 lists property used more than 50% for business, with the elected Section 179 cost in column (i); line 27 lists property used 50% or less, depreciated straight-line over its ADS life (5 years for automobiles) with no Section 179 and no bonus. Line 28 totals column (h) and goes to line 21; line 29 totals column (i) and goes to line 7. A later drop to 50% or less business use recaptures the excess Section 179 and bonus as income on Form 4797.

Passenger automobile caps. The Section 280F dollar limits cap the combined depreciation, bonus, and Section 179 for any passenger automobile (including trucks and vans) rated at 6,000 pounds or less. For automobiles placed in service in calendar 2026, Rev. Proc. 2026-15 sets the caps at $20,300 in the first year when bonus applies, $19,800 in the second, $11,900 in the third, and $7,160 each year after; without bonus the first-year cap is $12,300. A heavier SUV escapes the 280F cap but meets the $32,000 Section 179 cap described in Part I, with bonus covering the rest of its cost.

Sections B and C, lines 30 through 41. Section B is for vehicles used by a sole proprietor, partner, or other more-than-5% owner: business miles (line 30), commuting miles (31), other personal miles (32), total miles (33), and three yes-or-no questions on personal availability and use (34 through 36). Standard-mileage filers complete only lines 24a and 24b, columns (a) through (c) of Section A, and Section B; a Schedule C filer with no other reason to file Form 4562 answers the vehicle questions in Schedule C Part IV instead. Section C, lines 37 through 41, is for employers providing vehicles to employees, and a "Yes" on any of its five policy questions means Section B is not required for those vehicles.

Part VI: Amortization, Lines 42 Through 44

Line 42 is for costs whose amortization begins this year: description (column a), start date (b), amortizable amount (c), Code section (d), period or percentage (e), and this year's amortization (f). Line 43 is one total for costs that began amortizing in earlier years, and line 44 sums column (f).

• Start-up costs, code section 195. Under IRC Section 195(b) you deduct up to $5,000 of start-up expenditures in the year the business begins, reduced dollar for dollar by the amount those expenditures exceed $50,000, and amortize the remainder over 180 months from the month the business begins; the election is made by claiming the amounts on the return.
• Section 197 intangibles. Goodwill, going concern value, customer lists, licenses, covenants not to compete, and trademarks acquired with a business are amortized over 15 years (180 months) under IRC Section 197(a), starting with the later of the month acquired or the month the business begins.

Where line 44 goes depends on the return. For Schedule C it is reported on line 27a as an other expense, not on line 13. For partnerships and S corporations the line 44 instructions send start-up and organizational amortization to a separately stated item on Schedules K and K-1.

Worked Example: $60,000 of Equipment and $45,000 of Business Income

Emeka is a sole-proprietor data consultant who places $60,000 of computer and server hardware (5-year property, 100% business use) in service in March 2026. It is his only purchase of the year, and his Schedule C profit before depreciation is $45,000, with no W-2 wages. Both routes below reach the same $60,000 first-year deduction; the difference is which lines carry it and what happens if he fills the form the wrong way.

Path A works because Emeka elects only $45,000 in column (c) of line 6, exactly what line 11 allows, and lets the remaining $15,000 of basis take 100% bonus on line 14. Had he elected the full $60,000, line 12 would still stop at $45,000, line 13 would carry $15,000 to 2027, and no bonus would be available for that $15,000 this year. Path B skips Part I altogether, has no income test, and produces the same $60,000. Section 179 earns its place mainly when a state does not conform to bonus depreciation, or when you want to expense one asset while electing out of bonus for its whole class.

Path C, for completeness: electing out of both by attaching the class statement puts $60,000 in column (c) of line 19b, "5 yrs." in (d), "HY" in (e), "200 DB" in (f), and $12,000 (20%) in column (g); line 22 reads $12,000, and the other $48,000 is recovered from 2027 through 2031 at 32%, 19.2%, 11.52%, 11.52%, and 5.76%.

What Form 4562 Does NOT Do

• It is not required every year for assets already in service: continuing depreciation on prior-year, non-listed assets goes straight to Schedule C line 13 from your own schedule
• It does not report de minimis safe harbor items: purchases of $2,500 or less per item expensed under that election are ordinary expenses, not depreciation
• It does not replace Form 4797: sales, trade-ins, and recapture of Section 179 or bonus are figured there, not on Form 4562
• It does not lift the Section 280F caps: a $70,000 sedan still stops at $20,300 in 2026 no matter what you enter on line 25 or 26

Common Form 4562 Mistakes

1. Electing more on line 6 than line 11 allows. The excess sits on line 13 as a carryover and gets no bonus depreciation. Elect only what business income supports and send the rest to line 14.
2. Putting a partnership's Section 179 on line 22. Partnerships and S corporations exclude line 12 from line 22; it passes through on Schedule K line 12 (Form 1065) or line 11 (Form 1120-S).
3. Assuming the half-year convention after a December splurge. If more than 40% of the year's depreciable basis arrived in the last three months, column (e) must read "MQ" for every asset placed in service that year.
4. Putting amortization on Schedule C line 13. Line 44 belongs on line 27a as an other expense; line 13 is for depreciation and Section 179 only.

Placed-in-Service Dates You Can Prove: How Jupid Helps

Every Form 4562 entry starts with a date, a cost, and a business-use percentage, and the audit question is always whether you can show all three. Jupid is an AI accountant that connects to your business bank accounts and categorizes each transaction automatically at 95.9% accuracy, so a $60,000 hardware purchase is flagged as an asset with its date and amount the day it clears, not reconstructed from a bank statement in April. Ask in WhatsApp or iMessage "what equipment did I buy this year and when?" and you get the list in real time, ready to hand to whoever prepares the form. Try Jupid.

Action Checklist

• List every asset placed in service this year with its date, cost after trade-in, and business-use percentage
• If any item is a vehicle or other listed property, complete Part V first and carry lines 28 and 29 to lines 21 and 7
• Enter elected Section 179 cost in column (c) of line 6 at no more than line 11 supports
• Decide bonus depreciation class by class; attach the election-out statement if you are opting out
• Carry line 22 to Schedule C line 13, Form 1065 line 16a, Form 1120-S line 14, or Form 1120 line 20; partnerships and S corporations move line 12 to Schedule K
• Keep a copy of the filed form; next year's line 10 and line 17 depend on this year's line 13 and Part III

Sources

• IRS: Instructions for Form 4562 (2025): who must file, line-by-line rules, election out, listed property, Table A
• IRS: Form 4562, 2025 revision: line labels for Parts I through VI
• IRS Publication 946, How To Depreciate Property: MACRS classes, conventions, and the mid-quarter percentage tables
• IRS Publication 463, Travel, Gift, and Car Expenses: vehicle recordkeeping and business-use substantiation
• IRS: Instructions for Schedule C (Form 1040): line 13, Part IV vehicle rule, amortization on line 27a
• IRS: Form 1065 and IRS: Form 1120-S: line 16a and Schedule K line 12; line 14 and Schedule K line 11
• Rev. Proc. 2025-32: tax year 2026 Section 179 limit $2,560,000, phase-out $4,090,000, SUV cap $32,000
• Rev. Proc. 2026-15: 2026 passenger automobile depreciation caps
• IRC Section 179: dollar limitation, business income limitation, SUV definition
• IRC Section 168: MACRS, mid-quarter convention, special depreciation allowance
• IRC Section 195 and IRC Section 197: start-up costs and intangibles
• IRC Section 280F: passenger automobile limits
• Treasury Regulation Section 1.179-2: taxable income limitation and carryover
• Treasury Regulation Section 1.168(k)-2: election out of the special depreciation allowance

This guide is for general educational purposes and does not constitute tax, legal, or accounting advice. Depreciation results depend on placed-in-service dates, business-use percentages, state conformity, and elections made on a timely filed return, and the IRS revises Form 4562 annually. For advice specific to your situation, consult a qualified tax professional.