Updated October 18, 2026. Quick answer: Lines 1 to 5 are the first half of Part I, the section 179 election. Line 1 is the maximum amount, line 2 is the total cost of your section 179 property, line 3 is the threshold, line 4 is the reduction and line 5 is the dollar limit that the rest of Part I works from. The maximum and threshold come from the instructions and Worksheet 1.
More IRS forms and schedules for individual filers, read line by line: Form 8911 instructions and Form 2106 standard mileage rate.
Related reading on this site: IRS Publication 946 and IRS Publication 463.
S corporation return (Form 1120-S) for 2025, read line by line: Form 1120-S lines 13 to 22 and Form 1120-S Schedule K lines 11 to 13.
Partnership return (Form 1065) for 2025, read line by line: Form 1065 lines 15 to 18 and Form 1065 Schedule K lines 12 to 14.
What lines 1 to 5 ask for
Part I is headed “Election To Expense Certain Property Under Section 179”. The form adds a warning before you start: “If you have any listed property, complete Part V before you complete Part I.” The five captions are “Maximum amount (see instructions)”, “Total cost of section 179 property placed in service (see instructions)”, “Threshold cost of section 179 property before reduction in limitation (see instructions)”, “Reduction in limitation. Subtract line 3 from line 2.” and “Dollar limitation for tax year. Subtract line 4 from line 1.” The instructions open Part I with “An estate or trust cannot make this election.” This page is part of the Form 4562 walk-through, and the next group of lines is at lines 6 to 13.
Line 1: the maximum amount
The instructions for line 1 say “Generally, the maximum section 179 expense deduction is $2,500,000 for section 179 property (including qualified section 179 real property) placed in service during the tax year beginning in 2025.” They add a tool: “You can use Worksheet 1 to assist you in determining the amount to enter on line 1.” Worksheet 1 sits in the instructions under the heading for lines 1, 2 and 3, so use it by name rather than working from memory.
Line 2: total cost of section 179 property
The instructions say “Enter the total cost of all section 179 property you placed in service during the tax year”. They then list what to include in that total, starting with “Any listed property from Part V.” and “Any property placed in service by your spouse, even if you are filing a separate return.” Line 2 counts the cost of all of it, not only the part you plan to expense; the footnote to Worksheet 1 says to include the total amount of eligible section 179 property, not just the amount for which you are making the election.
What counts as section 179 property is defined near the front of the instructions, which open with “Section 179 property is property that you acquire by purchase for use in the active conduct of your trade or business”. Rental activities and partnership income that flow through are covered at Schedule E and Schedule K-1 box 12.
Line 3: the threshold
The instructions for line 3 say “This amount is reduced if the cost of all section 179 property placed in service in 2025 is more than $4,000,000.” The same paragraph says who the limits apply to: “For a partnership, these limitations apply to the partnership and each partner.” and “For a controlled group, all component members are treated as one taxpayer.”
Line 4: the reduction
The instructions have no separate paragraph for line 4, so the form’s own caption is the guide: “Reduction in limitation. Subtract line 3 from line 2.” The caption also tells you what to do when the answer is negative, so read the full printed line. A computed illustration, not an IRS example: if line 2 were $4,300,000 and line 3 were $4,000,000, line 4 would be $4,300,000 minus $4,000,000, which is $300,000.
Line 5: the dollar limit for the year
Line 5 is the caption’s subtraction of line 4 from line 1. The instructions explain what a zero means: “If line 5 is zero, you cannot elect to expense any section 179 property.” Continuing the computed illustration above (not an IRS example), with line 1 at $2,500,000 and line 4 at $300,000, line 5 would be $2,500,000 minus $300,000, which is $2,200,000.
For married couples filing separately the instructions say “If you are married filing separately, you and your spouse must allocate the dollar limitation for the tax year.” The method is “To do so, multiply the total limitation that you would otherwise enter on line 5 by 50% (0.50), unless you both elect a different allocation.”
Where the number comes from
Line 1 comes from the instructions and Worksheet 1, line 2 from your own asset records for property placed in service this year, and line 3 from the base threshold printed on Worksheet 1. Lines 4 and 5 are arithmetic on those entries. The section 179 expense deduction itself is not figured until lines 6 to 13.
Where it goes next
Line 5 feeds the rest of Part I. Line 9 says “Enter the smaller of line 5 or line 8”, and line 11 says “Enter the smaller of business income (not less than zero) or line 5.” Depreciation on property you do not expense is covered at lines 14 to 20.
Edition and line numbers
This page reads the 2025 Form 4562, Depreciation and Amortization, and its 2025 instructions, the current files irs.gov served on 2026-10-18. They are the files for the tax year 2025 return, filed in 2026. The form’s own header says “Attach to your tax return.” Check the tax year printed on the form you are filling in and use the line numbers on that year’s form, because a different year’s form can number or word its lines differently.
Common mistakes
- Counting only the property you plan to expense on line 2. The instructions say “Enter the total cost of all section 179 property you placed in service during the tax year”.
- Leaving out a spouse’s property when you file separately. The instructions list “Any property placed in service by your spouse, even if you are filing a separate return.”
- Entering the full limit on line 5 as a married person filing separately. The instructions say “Do not enter on line 5 more than your share of the total dollar limitation.”
Related: Form 4562, Schedule E, Schedule K-1 box 12, and Schedule C lines 12 and 13.
Sources
- Instructions for Form 4562, Depreciation and Amortization (2025): https://www.irs.gov/pub/irs-pdf/i4562.pdf
- Form 4562, Depreciation and Amortization (2025): https://www.irs.gov/pub/irs-pdf/f4562.pdf
Read from the IRS documents linked above on October 18, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.