Electing the Section 179 Deduction | Form 4562

If you are a small or medium sized business owner who has purchased or leased equipment in 2009 and placed it into service during the calendar year, then you need to elect to take the Section 179 Deduction to ensure that your business captures the available tax savings (it is not automatic - you must elect to take it.)

Fortunately, electing to take the 179 Deduction is very easy:

When to take the Section 179 Deduction

You elect to take the deduction when you file your tax return for the year, whether you are filing on time or received an extension.

How to take the Section 179 Deduction

To elect to take the Section 179 Deduction, simply fill out Part 1 of IRS form 4562, available for free below, and attach it to your tax return (much like any other additional form, such as a "Schedule C" or similar.)

Download IRS form 4562 from www.IRS.gov

Download instructions for IRS form 4562 from www.IRS.gov

If you do not feel comfortable filling out the form yourself, your tax preparer can easily take care of form 4562 for you. Your tax preparer may also be able to advise you of additional Section 179 Deduction savings that may be available to you.

As we mentioned previously, most equipment that you purchase or lease for business use is going to qualify for the section 179 Deduction. You can verify whether or not the business equipment that you have purchased or leased qualifies for the Section 179 Deduction by reviewing our list of qualifying property or equipment.

Is there anything else I should know?

The Section 179 is taken on an item by item basis, and you do not have to use it on all eligible property bought during the year if you do not wish to do so.

Extensions and Amended Returns

You may claim Section 179 deductions up to the due date (including extensions) for filing your taxes for the tax year you are claiming the deduction. This means that you are not allowed to claim Section 179 for previous tax years.

However, you MAY amend a current year return - for example, for tax year 2008, the maximum extended due date (with extensions) for filing is October 15, 2009. You file your 2008 return on Sept. 1, 2009 and then realize you didn't utilize the Section 179 deduction, you still have until the Oct. 15, 2009 deadline to file an amended tax return to claim the deduction. But you *cannot* go back and amend 2007's return and add Section 179 deductions (as that deadline passed 10/15/2008).

Please note

You must keep complete records of the business equipment you leased or purchased during the year, including where you acquired the equipment from and the date the equipment was acquired and placed into service. If filing for 2008, the equipment must have been leased or purchased and placed into service between January 1, 2008 and December 31, 2008.