Updated October 28, 2026. Quick answer: Worksheet 1 in the Instructions for Form 4562 works out the maximum section 179 deduction for 2025. It is $2,500,000 and is reduced dollar for dollar once the cost of section 179 property placed in service passes $4,000,000. Its answers go to Form 4562 lines 1, 2 and 3 and the cap for lines 6 and 7.
Related reading on this site: IRS Publication 225.
What this worksheet is for
It sits under the line 1 to 3 instructions. “You can use Worksheet 1 to assist you in determining the amount to enter on line 1.” The reduction rule is stated there: “This amount is reduced if the cost of all section 179 property placed in service in 2025 is more than $4,000,000.” The line-by-line view of the form is on Form 4562 lines 1 to 5.
The worksheet line by line
| Line | What the worksheet says |
|---|---|
| Purpose | “Maximum section 179 limitation calculation.” |
| Line 1 | “Enter total cost of section 179 property (including qualified section 179 real property) placed in service during the tax year beginning in 2025” |
| Line 2 | “The maximum section 179 deduction limitation for 2025”: $2,500,000 |
| Line 3 | “Enter the smaller of line 1 or line 2 here” |
| Line 4 | “Enter the amount from line 3 here and on Form 4562, line 1” |
| Line 5 | “Enter the amount from line 1 here and on Form 4562, line 2” |
| Line 6 | “Base maximum threshold cost of section 179 property before reduction in limitation for 2025. Enter this amount on Form 4562, line 3”: $4,000,000 |
| Line 7 | “Enter the smaller of line 1 or line 4. The total amount you enter on Form 4562, lines 6 and 7, column (c), cannot exceed this amount” |
Example: a 2025 purchase year above the threshold
Illustration, not an IRS example. The cost is invented and each result is computed from it.
| Item | Illustration |
|---|---|
| Cost of section 179 property placed in service in 2025 (invented) | $4,300,000 |
| Amount over the $4,000,000 threshold, computed | $300,000 (computed) |
| Maximum deduction after the reduction, computed: $2,500,000 minus the excess | $2,200,000 (computed) |
The 2026 figures
Rev. Proc. 2025-32 states for tax years beginning in 2026: “the aggregate cost of any § 179 property that a taxpayer elects to treat as an expense cannot exceed $2,560,000” and “the $2,560,000 limitation under § 179(b)(1) is reduced (but not below zero) by the amount by which the cost of § 179 property placed in service during the 2026 taxable year exceeds $4,090,000.” These are the IRS’s published figures, read from the revenue procedure and not recomputed from the price index.
Illustration, not an IRS example: the same worksheet method on the 2026 figures, with computed results.
| Item | Illustration |
|---|---|
| Cost of section 179 property placed in service in 2026 (invented) | $4,590,000 |
| Amount over the $4,090,000 threshold, computed | $500,000 (computed) |
| Maximum deduction after the reduction, computed: $2,560,000 minus the excess | $2,060,000 (computed) |
Edition
This page reads the Instructions for Form 4562 (2025), the current file irs.gov served on 2026-10-28 (sha256 in the kit data). The Worksheet 1 in it is for the tax year 2025 return, filed in 2026. Check the tax year printed on the worksheet in your own copy and use that year’s line numbers and dollar amounts, because a different year’s worksheet can word its lines differently.
Common mistakes
- Entering only the elected amount on line 1. The instructions’ footnote says to include the total eligible property, not just the amount for which you are making the election.
- Using 2025 figures for 2026 purchases. The limit and threshold both change.
- Forgetting the spouse rule: line 2 counts “Any property placed in service by your spouse, even if you are filing a separate return.”
Related: Form 4562 lines 1 to 5, Form 4562 lines 6 to 13, and Form 4562.
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Answer againSources
- Instructions for Form 4562 (2025): https://www.irs.gov/pub/irs-pdf/i4562.pdf
- Rev. Proc. 2025-32, 2026 Adjusted Items: https://www.irs.gov/pub/irs-drop/rp-25-32.pdf
Read from the IRS documents linked above on October 28, 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.