when individuals or businesses purchase property to use in their business the irs does not allow them to claim the full cost as a business deduction in the first year however they can deduct a portion of their costs each year by claiming a depreciation deduction and reporting it on irs form 4562 1
individuals and businesses can claim deductions for both tangible assets such as a building and intangible assets such as a patent section 179 property which is actively used to conduct business cannot include investment property hotels or property primarily held abroad 2who can file form 4562 depreciation and amortization anyone who wants to claim the following must fill out form 4562 and include the following 1separate forms must be filed for each business or activity for which a form 4562 is required 1 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 this form does not apply to employees who wish to deduct job related vehicle expenses 1 that deduction has been discontinued after the passing of the tax cuts and jobs act 3