How to Easily Complete Form 4562

Index

• Information You'll Need
• Necessary Documentation
• Sources

Let's dive into what you'll need to easily complete Form 4562.

Information You'll Need

To successfully complete Form 4562, you'll need to gather the following information:

1. Business details: Your business name, activity, and identifying number (EIN or SSN)¹.

2. Property information: A list of all depreciable assets placed in service during the tax year, including:

   • Description of the property
   • Date placed in service
   • Cost or other basis
   • Business/investment use percentage
   • Recovery period
   • Convention used (e.g., half-year, mid-quarter)
   • Depreciation method (e.g., 200% declining balance, straight line)²

3. Section 179 expense details: If you're planning to take the Section 179 deduction, you'll need:

   • Total cost of Section 179 property placed in service
   • Description of each property and its cost
   • Amount you're electing to expense for each property¹

4. Listed property information: For vehicles and other listed property, you'll need:

   • Type of property
   • Date placed in service
   • Business/investment use percentage
   • Cost or other basis
   • Mileage information for vehicles (business, commuting, and personal miles)³

5. Amortization details: If you're claiming amortization, you'll need:

   • Description of costs
   • Date amortization begins
   • Amortizable amount
   • Code section
   • Amortization period or percentage³

6. Prior year information: If you filed Form 4562 in the previous year, you'll need the carryover of disallowed deduction from line 13 of your previous year's form¹.

Necessary Documentation

To support the information you'll be entering on Form 4562, make sure you have the following documentation on hand:

1. Purchase records: Invoices, receipts, and contracts for all depreciable property acquired during the tax year².

2. Vehicle logs: Detailed mileage logs for any vehicles used for business purposes, including dates, destinations, and purpose of trips³.

3. Asset register: A comprehensive list of all depreciable assets, including their purchase dates, costs, and depreciation methods².

4. Prior year tax returns: Your previous year's tax return and Form 4562, if applicable¹.

5. Business use evidence: Documentation supporting the business use percentage of any assets, especially for listed property³.

6. Amortization schedules: Any existing amortization schedules for costs you're continuing to amortize³.

7. Section 179 records: Detailed records of any property you plan to expense under Section 179, including proof that the property was placed in service during the tax year¹.

8. Bonus depreciation documentation: Records supporting any bonus depreciation claims, including the date the property was placed in service and its eligibility for bonus depreciation².

By gathering all this information and documentation before you start, you'll be well-prepared to tackle Form 4562 with confidence. With these materials at hand, you'll be able to navigate the form's complexities more easily and ensure that you're claiming all the deductions you're entitled to.

Footnotes

1. https://www.irs.gov/pub/irs-pdf/i4562.pdf ↩ ↩² ↩³ ↩⁴ ↩⁵

2. https://www.balboacapital.com/blog/guide-to-irs-form-4562/ ↩ ↩² ↩³ ↩⁴

3. https://www.irs.gov/pub/irs-pdf/f4562.pdf ↩ ↩² ↩³ ↩⁴ ↩⁵