IRS Form 4562 Depreciation – Part 6

Part VI – Amortization

The purpose of IRS Form 4562 is to claim your deduction for depreciation, declare any section 179 expense and provide information on listed property. There are six parts to this form and we will dive into the detail of each part. Part VI – Amortization consists of 3 lines as shown in this image:

IRS Form 4562 Depreciation – Part 6

This part is for any amortization you claim. Amortization allows you to deduct part of certain capital costs over a fixed period. Amortization costs that begin in the current year are entered on line 42 (along with a description of the costs and other information); amortization of costs in earlier years are entered on line 43.

For complete instructions review the IRS instructions to Form 4562 or consult a tax professional.

Questions? Comments? Let us know in the comments section below.

More information about Bassets eDepreciation software can be found at Bassets.net or depre123.com. At Bassets register for our live webinar, download a free evaluation copy and get a personalized pricing estimate. At depre123 try out our Free Depreciation Calculator and check out our cloud based fixed assets application.

IRS Form 4562 Depreciation – Part 5

Part V – Listed Property

The purpose of IRS Form 4562 is to claim your deduction for depreciation, declare any section 179 expense and provide information on listed property. There six parts to this form and we will dive into the detail of each part. Part V – Listed Property consists of 18 lines as shown in this image:

IRS Form 4562 Depreciation – Part 5

This section is for claiming write-offs for listed property: cars weighing 6,000 pounds or less, pickup trucks, computers and peripheral equipment, video recording equipment and other property specifically called “listed property.”

Section A is for the depreciation allowance for listed property, including the Section 179 deduction and bonus depreciation. Section B is used to provide information about vehicles used by sole proprietors, partners or other “more than 5% owners” or people related to these business owners. Section C is used by an employer to report certain information on employee use of company vehicles.

For complete instructions review the IRS instructions to Form 4562 or consult a tax professional.

Questions? Comments? Let us know in the comments section below.

More information about Bassets eDepreciation software can be found at Bassets.net or depre123.com. At Bassets register for our live webinar, download a free evaluation copy and get a personalized pricing estimate. At depre123 try out our Free Depreciation Calculator and check out our cloud based fixed assets application.

IRS Form 4562 Depreciation – Part 4

Part IV – Summary

The purpose of IRS Form 4562 is to claim your deduction for depreciation, declare any section 179 expense and provide information on listed property. There six parts to this form and we will dive into the detail of each part. Part IV – Summary consists of 3 lines as shown in this image:

IRS Form 4562 Depreciation – Part 4

This part of the form is merely a summary from parts I, II and III, as well as listed property in Part V. Line 21 is for listed property and we will cover that in more detail in the next post.

Line 22 is the key entry; it is the amount of depreciation that is deductible. The amount on line 22 is reported on the appropriate line of your tax return. There are different instructions for Partnerships and S corporations. Line 23 deals with capitalization rules of section 263A that details how certain costs are capitalized as part of inventory.

For complete instructions review the IRS instructions to Form 4562 or consult a tax professional.

Questions? Comments? Let us know in the comments section below.

More information about Bassets eDepreciation software can be found at Bassets.net or depre123.com. At Bassets register for our live webinar, download a free evaluation copy and get a personalized pricing estimate. At depre123 try out our Free Depreciation Calculator and check out our cloud based fixed assets application.

IRS Form 4562 Depreciation – Part 3

The purpose of IRS Form 4562 is to claim your deduction for depreciation, declare any section 179 expense and provide information on listed property. There are six parts to this form and we will dive into the detail of each part. Part III – MACRS Depreciation Allowance for Assets Placed in Service During the Current Tax Year consists of 14 lines as shown in this image:

IRS Form 4562 Depreciation – Part 3

This section is for basic depreciation (other than depreciation for listed property, which is entered in Part V) under the Modified Accelerated Cost Recovery System (MACRS) that was created in 1986 and continues to apply today. A single entry on line 17 is used to report deductions for assets placed in service before 2014 (refer to your prior tax returns or any worksheets you may have retained to determine the amount to enter here).

Details about assets placed in service during the current tax year using GDS are entered on lines 19a through 19i depending on the appropriate recovery periods. The same applies for assets using ADS and are entered on lines 20a through 20c.

For complete instructions review the IRS instructions to Form 4562 or consult a tax professional.

Questions? Comments? Let us know in the comments section below.

More information about Bassets eDepreciation software can be found at Bassets.net or depre123.com. At Bassets register for our live webinar, download a free evaluation copy and get a personalized pricing estimate. At depre123 try out our Free Depreciation Calculator and check out our cloud based fixed assets application.

IRS Form 4562 Depreciation – Part 2

The purpose of IRS Form 4562 is to claim your deduction for depreciation, declare any section 179 expense and provide information on listed property. There six parts to this form and we will dive into the detail of each part. Part II – Special Depreciation Allowance and Other Depreciation consists of 3 lines as shown in this image:

IRS Form 4562 Depreciation – Part 2

This part of the form is used for a special depreciation allowance (also called “bonus depreciation”), which is a percentage allowance claimed in the year that eligible property is placed in service. Here are the bonus percentages for 2015 through 2019:

  • 2015 – 2017 equals 50%
  • 2018 equals 40%
  • 2019 equals 30%

We have written many posts on the topic of bonus depreciation and you can find them in our archives to help answer any questions.

For complete instructions review the IRS instructions to Form 4562 or consult a tax professional.

Questions? Comments? Let us know in the comments section below.

More information about Bassets eDepreciation software can be found at Bassets.net or depre123.com. At Bassets register for our live webinar, download a free evaluation copy and get a personalized pricing estimate. At depre123 try out our Free Depreciation Calculator and check out our cloud based fixed assets application.