INSTRUCTIONS : DEPRECIATION AND AMORTIZATION (Form 4562)
Form 4562 is a United States Internal Revenue Service tax form used for reporting to the IRS the depreciation and amortization of equipment used by businesses. The most common property claimed on the Form 4562 are corporate vehicles and equipment or income producing property which has lost value.
The Form 4562 can be obtained through the I.R.S’ website or by obtaining the documents through a local tax office.
The form must be used with section 179 of the tax code, which states the type of property that can be claimed for depreciation.
1. Select the values of the property which you are expensing in part I. Include the maximum amount allowed, total cost of section 179 property, the threshold cost of section 179 property, the reduction in limitation, and the dollar limitation for the tax year.
2. Continue listing your section 179 property until you determine your section 179 expense deduction in line 12. If you have any carryover deductions from the previous year, enter that amount in line 13.
3. If you are claiming listed property, skip to part V.
4. Otherwise, you must enter any special depreciation allowance in part II.
5. If you have any MACRS depreciation, you must enter that information in part III. Enter the information in section B and section C, indicating the classification of the property and the depreciation amount for each claimed property.
6. Fill in the summary of all depreciation amounts in part IV.
7. Use part V for all listed property you are claiming in the Form 4562. This may include automobiles, computers, or property with shared use for entertainment or recreational purposes.
8. List each property in the grid, indicating the amount of time the vehicle is used for personal reasons or for business purposes.
9. Completely fill out sections A, B, and C, indicating the use of the vehicle, who had access to the vehicle, and how often the vehicle was available for personal use.
10. If you are amortizing your costs, you must fill out part VII, describing the cost, the dates of amortization, and total amounts amortized.
11. File your completed Form 4562 with your corporate income taxes. Retain a copy for your records.