If you own a business, Section 179 of the tax code allows you to deduct the cost of certain types of equipment purchased for your business. You fill out form 4562 to claim this deduction.

Purpose of Form 4562

Aside from claiming a deduction under section 179, form 4562 is used to claim any depreciation of property, amortization of costs, and any vehicle deduction not reported on Schedule C.

Equipment That You Can Deduct

• Office furniture, computers and software, and office equipment such as copiers and fax machines are eligible for the section 179 deduction.

• Equipment That You Cannot Deduct

• You cannot deduct the cost of heat or air conditioning units purchased, land or building purchased, or anything purchased for personal use.

• Depreciation

• Depreciation allows you to deduct the cost of equipment over a span of years. For instance, if you purchased a copier for $40,000, you could deduct $10,000 per year for it until you've deducted the full price or no longer use that copier.

• Amortization

• Amortization is similar to depreciation. Certain costs are deducted over a period of years. Intangible items, such as business start-up costs, can be amortized.