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3 big write-offs on Form 4562

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in Small Business Tax,Small Business Tax Deduction Strategies

Thanks in part to ATRA, certain business owners and real estate owners can continue to claim three generous deductions for 2012 on Form 4562, Depreciation and Amortization. The three breaks are as follows:

  1. A business can claim a maximum Section 179 deduction of $500,000 with a phaseout threshold of $2 million. The deduction is claimed in Part I, Election to Expense Certain Property Under Section 179.
  2. A real estate owner can write off up to $250,000 of qualified real property, including expenditures for qualified leasehold improvements, qualified restaurant buildings and improvements and qualified retail improvements.
  3. A business can deduct 50% bonus depreciation for qualified new (not used) property placed in service in 2012. The deduction is claimed in Part II, Special Depreciation Allowance and Other Depreciation.

Tip: This is down from 100% bonus depreciation in 2011.

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