Last Updated : January 14, 2009
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4562summary

Form 4562 Summary

Depreciation and Amortization Summary

PURPOSE OF THE FORM:

Use form 4562summary to :

  • Claim your deduction for depreciation and amortization if you added more than 2 depreciation worksheets under different 4562 forms.
  • make the election under section 179 to expense certain properties , and
  • Provide information on the business/ investment use of automobiles and other listed properties .

SECTION 179 SUMMARY:

Value on this form will only flow if more than 2 forms 4562 are added under different forms. This gives an added advantage to have a summarized total that can be claimed with ease on various forms where they are actually claimed for tax payer having more than 2 properties. Moreover it gives an overview of overall advantage that he may get by claiming the depreciation or amortization of his various properties.

PART - I ELECTION TO EXPENSE CERTAIN PROPERTY UNDER SECTION 179

Line 1:
The program makes the total of all 4562 forms added on more than 2 different forms and brings the total to their respective line on 4562summary.
Generally the maximum section 179 deduction is $125000.

For an enterprise zone business or a renewal community business, the maximum deduction is increased by the smaller of : $35000 OR The cost of section 179 property that is also Qualified empowerment zone property or Qualified renewal property.

For Qualified section 179 GO Zone property, the maximum deduction is increased by the smaller of $100000 OR The cost of Qualified section 179 GO Zone property placed in service during the tax year.

Line 2:
The program makes the total of all 4562 forms added on more than 2 different forms and brings the total to their respective line on 4562summary.

The Program sets the value of all such properties for which section 179 eligibility checkbox NO is checked from section 179 summary . Here value of section 179 property is arrived at by multiplying the cost of asset by the business use percentage.

Line 3 inner :
The program makes the total of all 4562 forms added on more than 2 different forms and brings the total to their respective line on 4562summary.

The amount of section 179 property for which the taxpayer can make election is limited to the maximum dollar amount on line 1. In most cases , this amount is reduced if the cost of all section 179 property placed in service during the year is more than $500000.

If Qualified section 179 GO Zone property is paced in service during the tax year , the amount of property for which you can make the election is reduced if the cost of all section 179 property placed in service during the year exceeds $500000 increased by the smaller of : $600000 OR the cost of Qualified section 179 GO Zone property placed in service during the tax year.

Line 4:
The program subtracts line 3 inner box if higher limit is applicable from line 2 and enters the result on this line . Otherwise the program subtracts line 3 outer from line 2 and enters the result on this line.

Line 5:
The program subtracts line 4 from line 1 inner box if higher limit is applicable or otherwise from line 1 outer and enters the result on this line.

If line 5 is zero, the taxpayer cannot elect to expense any section 179 property.

If the filling status is married filling separately then the taxpayer and spouse must allocate the dollar limitation for the tax year. Do not enter on line 5 more than the taxpayer share of the total dollar limitation.

Line 6:
The program makes the total of all 4562 forms added on more than 2 different forms and brings the total to their respective line on 4562summary.

The program transfers the data relating to property from all 4562 forms for that property section 179 eligibility checkbox is checked and is not a listed property.

column (a) :
The program transfers the description of property if that property doe snot qualifies for section 179 eligibility and is not a listed property.

column (b) :
The program transfers the net amount by subtracting land price from cash paid or Cost whichever is entered if that property is not eligible for section 179 and is not a listed property and such net amount is multiplied by business use percentage and entered on this line.

column (c) :
The program transfers the amount of 179 property election from depreciation worksheet if such property is not eligible for section 179 and is not a listed property.

Line 7:
The program makes the total of all 4562 forms added on more than 2 different forms and brings the total to their respective line on 4562summary.
The program enters the value on this line from all form 4562 page-2 line 29 from part - V details of listed property which are used more than 50% in qualified business use.

Line 8 :
The program makes the total of all 4562 forms added on more than 2 different forms and brings the total to their respective line on 4562summary.
The program adds the amount of column c of line 6 and line 7 and enters on this line.

Line 9:
The program makes the total of all 4562 forms added on more than 2 different forms and brings the total to their respective line on 4562summary.
The program enters lower of line 5 or line 8 and enters the result on this line if the property does not qualify for section 179 deduction.

Line 10:
Enter on this line the carryover of disallowed deduction from 2006 that you elected to expense in previous years but was not allowed as a deduction because of the business income limitation. Enter on this line the amount from line 13 of your 2006 form 4562.

Line 11:
Enter on this line the lower of business income or line 5 amount.
The total cost which can be deducted is limited to your taxable income from the active conduct of trade or business during the year.
refer the instructions of FORM 4562 for amount to enter on this line.

Line 12:
The program adds lines 9 and 10 if more than 2 FORM 4562 are added under different forms and enters the result on this line but not more than line 11 if such property is not eligible for section 179 deduction.

Line 13:
The program adds lines 9 and 10 if more than 2 FORM 4562 are added under different forms and subtracts line 12 amount from the result and enters the net amount on this line. This is the total carryover of disallowed deduction for 2008.

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