Updated October 19, 2026. Quick answer: Publication 946 is the IRS guide to recovering the cost of business or income producing property through depreciation. The web edition is for 2025 returns and states a maximum section 179 expense deduction of $2,500,000 for tax years beginning in 2025. It has five chapters and appendices with MACRS percentage tables.
More IRS forms and schedules for individual filers, read line by line: Form 2106 standard mileage rate.
Quick reference
| Item | As the IRS publication states it |
|---|---|
| Maximum section 179 deduction, tax years beginning in 2025 (What’s New for 2025) | $2,500,000 |
| Phase out begins when section 179 property placed in service costs more than (What’s New for 2025) | $4,000,000 |
| Maximum section 179 deduction for sport utility vehicles, 2025 (What’s New for 2025) | $31,300 |
| Business use needed to elect section 179 on mixed use property (chapter 2) | more than 50% |
| Recovery period, residential rental property (chapter 4) | 27.5 years |
| Recovery period, nonresidential real property (chapter 4) | 39 years |
What the publication covers
The IRS publication says “This publication explains how you can recover the cost of business or income-producing property through deductions for depreciation” and that “It also explains how you can elect to take a section 179 deduction, instead of depreciation deductions, for certain property and the additional rules for listed property.”
The edition described here is Publication 946 (2025), How To Depreciate Property. The IRS source marks it with the line “For use in preparing 2025 Returns”. It also carries a What’s New for 2026 section.
The chapters in plain words
Chapter 1 is an overview of depreciation: what property can and cannot be depreciated, when depreciation begins and ends, and the basis of depreciable property, with Table 1-1 explaining the parts of Form 4562. Chapter 2 covers electing the section 179 deduction. Chapter 3 covers claiming a special depreciation allowance. Chapter 4 covers figuring depreciation under MACRS, including property classes, recovery periods and conventions. Chapter 5 covers additional rules for listed property. Appendix A is the MACRS percentage table guide with the percentage tables, and Appendix B is the table of class lives and recovery periods.
Tables and worksheets
Table 4-1 lists the depreciation methods. The IRS publication says “Appendix A contains the MACRS Percentage Table Guide, which is designed to help you locate the correct percentage table to use for depreciating your property.” This site has the Form 4562 pages that tie to these chapters: Form 4562, lines 1 to 5 on section 179 limits and lines 14 to 20 on special depreciation and MACRS.
The figures that matter
Section 179 limit: “For tax years beginning in 2025, the maximum section 179 expense deduction is $2,500,000.” “This limit is reduced by the amount by which the cost of section 179 property placed in service during the tax year exceeds $4,000,000.”
Sport utility vehicles: the publication says “the maximum section 179 expense deduction for sport utility vehicles placed in service in tax years beginning in 2025 is $31,300.”
2026: the publication’s What’s New for 2026 section says “For tax years beginning in 2026, the maximum section 179 expense deduction is $2,560,000.”
Mixed use: “When you use property for both business and nonbusiness purposes, you can elect the section 179 deduction only if you use the property more than 50% for business in the year you place it in service.”
Real property: the recovery period table shows residential rental property at 27.5 years and nonresidential real property at 39 years. Special allowance: the publication says “The special depreciation allowance is limited to 40% for certain qualified property acquired after September 27, 2017, and placed in service after December 31, 2024, and before January 1, 2026” and also that the new law “reinstated the 100% special depreciation allowance for certain qualified property acquired and placed in service after January 19, 2025”.
Where to go next
Rental depreciation is reported on Schedule E (Form 1040) and business depreciation on Schedule C (Form 1040). Listed property is covered at Form 4562 part V. When depreciated property is sold, see Form 4797 and depreciation recapture. A home office is covered at Form 8829.
Where this comes from
The IRS page About Publication 946 opens with “This publication explains how you can recover the cost of business or income-producing property through deductions for depreciation.” It links the PDF and eBook editions and the earlier revisions of the publication.
This page describes the web edition of Publication 946 (2025), How To Depreciate Property, as served on irs.gov on October 19, 2026. The IRS can revise a publication after we read it, and the IRS page controls. General information, not tax or legal advice.
Common mistakes
- Using this publication for a car. The introduction includes a table of other publications, and next to the entry for a car it lists 463, Travel, Gift, and Car Expenses.
- Using section 179 for property that is mostly personal. The publication says “When you use property for both business and nonbusiness purposes, you can elect the section 179 deduction only if you use the property more than 50% for business in the year you place it in service.”
- Applying these methods to old property. The publication says “The depreciation methods discussed in this publication generally do not apply to property placed in service before 1987.”
- Reading the 2025 and 2026 limits as one number. The publication lists $2,500,000 for tax years beginning in 2025 and $2,560,000 for tax years beginning in 2026.
Related: IRS publications by number, Form 4562, Form 4562 lines 1 to 5, section 179 limits, Form 4562 lines 14 to 20, special depreciation and MACRS, Form 4562 part V, listed property, Form 4797, Depreciation recapture, and Schedule E (Form 1040).
Sources
- IRS, Publication 946 (2025), How To Depreciate Property (irs.gov): https://www.irs.gov/publications/p946
- IRS, About Publication 946 (irs.gov): https://www.irs.gov/forms-pubs/about-publication-946
Read from the IRS pages linked above on October 19, 2026. General information, not tax or legal advice. The IRS publication and the instructions for your own form control, and your own facts decide the outcome.