Form 4562

Description

Complete Form 4562 if you are claiming (1) depreciation for property placed in service in the current tax year you are filing, (2) a section 179 expense deduction, (3) depreciation on any vehicle or other listed property (regardless of when it was placed in service), or (4) amortization of costs that begins during the current tax year you are filing.

Most software is depreciated using the straight line method over 3 years. Automobiles, computers, and copiers are depreciated over 5 years. Most furniture and equipment is depreciated over 7 years (however, equipment and furniture used in a rental real estate activity is depreciated over 5 years). Residential real property such as your home office or rental home is depreciated over 27.5 years. Nonresidential real property is depreciated over 39 years.

Form 4562 Tax Tips

1. The general rule for depreciation is that if purchased property or improvements to property are expected to have a life of more than one year, you need to depreciate the property. First-year expensing (Section 179 deduction of up to $105,000) allows many taxpayers to expense the property they purchased during the year instead of depreciating the property over several years.
2. If your rental property is damaged by vandalism, the repair costs to restore the property to its previous condition are deductible as repair and maintenance costs instead of being capitalized and depreciated.
   

E-File Today
    ... Fast
       ... Easy
          ... Accurate