DEFINITION of 'Form 4562: Depreciation and Amortization'

A tax form distributed by the Internal Revenue Service (IRS) and used to claim deductions for the depreciation or amortization of a piece of property, or Section 179 expense. Individuals and businesses can claim deductions for both tangible property, such as a building, and intangible property, such as a patent, but cannot depreciate land. Section 179 property, which is actively used to conduct business, cannot include investment property, hotels or property primarily held abroad.

BREAKING DOWN 'Form 4562: Depreciation and Amortization'

A separate IRS Form 4562 has to be filed for each activity requiring the form. For example, a new form must be filled out for each depreciation or amortization deduction being claimed for different properties. The IRS does not require detailed depreciation records to be attached, but taxpayers should keep such records in order to calculate the depreciation deduction.

Employees deducting job-related vehicle expenses should use Form 2106 instead of Form 4562.

RELATED TERMS
  1. Section 1231 Property

    A tax term relating to depreciable business property that has ...
  2. Depreciable Property

    Any type of asset that is eligible for depreciation treatment. ...
  3. Unit of Production Method

    A depreciation procedure used for property that is not in continuous ...
  4. Form 4797

    A tax form distributed by the Internal Revenue Service (IRS) ...
  5. Listed Property

    A specific class of depreciable property that is subject to a ...
  6. Bonus Depreciation

    An additional amount of deductible depreciation that is awarded ...
Related Articles
  1. Financial Advisor

    How Does Depreciation Reduce My Tax Bill?

    How the depreciation tax rule can assist real estate investors.
  2. Taxes

    Filling Out Form 4562: Investopedia Explains

    Step-by-step, how to fill out the depreciation and amortization form for your business tax return.
  3. Investing

    How Rental Property Depreciation Works

    It's a bit tricky, but a valuable tool to make your investment pay off.
  4. Taxes

    Getting U.S. Tax Deductions On Foreign Real Estate

    If your home or second home is not in the United States, you can still get U.S. tax deductions. How many and what kind depends on whether you also rent it.
  5. Investing

    Use Real Estate To Put Off Tax Bills

    Find out how you can build wealth and reduce your taxes.
  6. Small Business

    Writing Off the Expenses of Starting Your Own Business

    Learn how to navigate the complicated rules for writing off the expenses of starting your own business. It could save you a lot of money.
  7. Taxes

    Sell Your Rental Property For a Profit

    Being a landlord can be taxing, especially when you want to sell. Find out how to reduce your burden.
  8. Personal Finance

    11 Tax Deductions You Can't Actually Write Off

    These are some of the most common tax write-offs that you can't really claim.
  9. Taxes

    What Is Section 1231 Property?

    Section 1231 property is depreciable business property that’s held for a year or longer.
RELATED FAQS
  1. Where do traders place orders when they identify ascending triangles?

    Learn which businesses are required to depreciate or amortize capital expenses, or CAPEX, and which businesses are eligible ... Read Answer >>
  2. Can real estate be depreciated?

    Decrease the amount of taxable income on your income-producing real estate by depreciating the asset on your federal income ... Read Answer >>
Hot Definitions
  1. Financial Statements

    Records that outline the financial activities of a business, an individual or any other entity. Financial statements are ...
  2. Operating Cost

    Expenses associated with the maintenance and administration of a business on a day-to-day basis.
  3. Money Market

    A segment of the financial market in which financial instruments with high liquidity and very short maturities are traded. ...
  4. Block (Bitcoin Block)

    Blocks are files where data pertaining to the Bitcoin network is permanently recorded.
  5. Fintech

    Fintech is a portmanteau of financial technology that describes an emerging financial services sector in the 21st century.
  6. Ex-Dividend

    A classification of trading shares when a declared dividend belongs to the seller rather than the buyer. A stock will be ...
Trading Center