Form 4562: A Simple Guide to IRS Depreciation Deductions 💼💰
If you’re a US small biz owner, saving on taxes is 🔑. One great way? IRS Form 4562, which helps you claim depreciation and amortization on assets like equipment, machinery, and vehicles. Instead of paying all at once, you spread out the cost — lowering your taxable income and boosting cash flow!
What’s Form 4562? 🤔
It lets you deduct the cost of business assets over time — so you don’t have to expense everything in one year. This reduces your tax bill and keeps more $$ in your pocket.
Key Parts of Form 4562:
1️⃣ Section 179 Deduction: Immediate Expensing
Deduct full cost of qualifying assets right away (up to a limit)
Great if you bought new equipment or software
Phases out if total asset purchases are too high
2️⃣ Bonus Depreciation: Extra First-Year Savings
Deduct a big chunk (up to 100%) of asset cost in year one
Applies to new & used assets
Helps improve cash flow ASAP
3️⃣ MACRS Depreciation: The Standard Way
Spreads depreciation over 3 to 39 years depending on asset
Accelerated deductions compared to straight-line method
IRS sets recovery periods by asset type
4️⃣ Listed Property: Business vs. Personal Use
For assets like vehicles or phones used for both business & personal stuff
Must be >50% business use to claim depreciation
Keep detailed records to prove business use
How to Maximize Your Deductions 💡
Track all asset purchases & usage
Pick the best depreciation method for your business goals
Stay updated on tax law changes
Work with corporate tax pros to get it right
Bottom line: Form 4562 is your secret weapon to save money and manage taxes smartly by spreading out asset costs. Whether you go for Section 179, bonus depreciation, or MACRS, knowing your options helps your business grow stronger!
🔗 Learn more at Counto.
Maximize your tax savings with IRS Form 4562. Learn how depreciation deductions, Section 179, and MACRS can reduce taxable income for your s