U.S. · Tax forms
Form 4562 line 12: section 179 deduction.
The allowed section 179 amount, the 2025 limits and what happens to the rest.
Line 12 of Form 4562 is your allowed section 179 expense deduction for the year. The 2025 instructions use a maximum of $2,500,000 and reduce it once the cost of section 179 property placed in service exceeds $4,000,000. The deduction is also capped by your taxable income from the active conduct of a trade or business (line 11). Any amount disallowed by that income limit is carried to line 13 and then to line 10 next year.
Look up a Part I line
Result
Part I lines that feed line 12
| Item | Meaning | Where it goes (per the IRS instructions) |
|---|---|---|
| Line 1 | Maximum amount | $2,500,000 for 2025 (Worksheet 1: the smaller of total cost of section 179 property or the maximum deduction limitation). |
| Line 3 | Threshold cost | $4,000,000 for 2025. The amount you may elect is reduced if total cost of section 179 property placed in service in 2025 exceeds it. |
| Line 5 | Dollar limit | If zero, you cannot elect to expense any section 179 property: skip lines 6 to 11 and enter zero on line 12. Married filing separately: 50% each unless you elect another split. |
| Line 10 | Carryover from 2024 | Section 179 you elected in earlier years but could not deduct because of the business income limit; from line 13 of your 2024 Form 4562. |
| Line 11 | Business income limit | The smaller of line 5 or your taxable income from an actively conducted trade or business, with the adjustments the instructions list. |
| Line 12 | Allowed deduction | The limits on lines 5 and 11 apply to the taxpayer, not to each business. Allocate among businesses with a “Summary” Form 4562. |
Who the limits apply to
For a partnership, the limits apply to the partnership and each partner. For an S corporation, they apply to the S corporation and each shareholder. For a controlled group, all component members are treated as one taxpayer.
The business income limit
The instructions say you are considered to actively conduct a trade or business only if you meaningfully participate in its management or operations, and that a mere passive investor is not. For individuals the limit includes wages, salaries, tips and other compensation from Form 1040 line 1a, and for a joint return the taxable incomes of you and your spouse are combined. Partnerships and S corporations use the income items the instructions describe.
More than one business
If you have more than one business or activity you can allocate your allowable deduction among them. Enter “Summary” at the top of Part I of a separate Form 4562 showing the totals, do not complete the rest of that form, and enter each business’s allocated amount on its own line 12.
Qualified section 179 real property
You can elect to treat certain qualified real property as section 179 property: qualified improvement property, and improvements to nonresidential real property such as roofs, heating, ventilation and air-conditioning, fire protection and alarm systems, and security systems. A deduction for that property disallowed by the income limit for 2025 can be carried over to 2026 and is reported on line 13.
Worked example
Lena runs a design studio as a sole proprietor and buys $50,000 of office equipment in 2025. She elects to expense all of it. Her taxable business income computed as the instructions describe is $30,000, so line 11 is $30,000 and line 12 is limited to $30,000. The remaining $20,000 is disallowed this year, goes on line 13 and is carried to line 10 on next year’s form.
More IRS form line pages
Other pages in this set: Form 8949 Boxes A-L, Form 5329 Part III, Form 4562 Line 14, Form 4562 Convention Codes, Form 5329 Line 52, Form 4562 Line 19, Form 4562 Line 42, Form 6251 Line 2i, Form 6251 Line 2c, Form 6251 Line 2l. The 1099-R box 7 lookup and W-2 box 12 lookup cover the same kind of question for those forms.
Sources
- Instructions for Form 4562 (2025): the sections for the lines and boxes on this page. Read November 2, 2026.
IRS page last reviewed April 30, 2026. Tax year 2025 edition. Line numbers, dollar limits and dates are those printed in the 2025 instructions and can change. Names in worked examples are made up.
Frequently asked questions
What is the section 179 limit for 2025 on Form 4562?
The 2025 instructions use a maximum of $2,500,000, reduced when total section 179 property placed in service exceeds $4,000,000.
What goes on line 12 of Form 4562?
Your allowed section 179 expense deduction, after the dollar limits and the business income limit on line 11.
What happens to a section 179 deduction I cannot use this year?
The portion disallowed by the business income limit is carried over: it is reported on line 13 and used as line 10 the next year.
Can a passive investor take section 179?
The instructions say a mere passive investor is not considered to actively conduct a trade or business, so that income does not count for the limit.
How do I split section 179 across several businesses?
Use a Form 4562 marked “Summary” for the totals and enter the amount allocated to each business on line 12 of that business’s own Form 4562.
Not tax advice
This page summarizes IRS instructions, mostly written for the people who prepare the form, and is not tax, legal or financial advice. The payer, a CPA or an enrolled agent can confirm what a box or code means for your return. Everything runs in your browser; nothing you enter is sent anywhere.