13 — Depreciation and Section 179 Expense Deduction Updated for tax year 2025

What this line means

The portion of business assets you can deduct this year for wear, tear, and obsolescence. Instead of deducting the full cost of an expensive asset (equipment, furniture, computers, vehicles) in the year you buy it, depreciation spreads the deduction over the asset’s useful life. Section 179 and bonus depreciation let you deduct the full cost in year one for qualifying assets, up to limits. You calculate this on Form 4562 and enter the result here.

Does this apply to you?

• You bought equipment, machinery, or tools for your business costing more than a trivial amount
• You purchased a computer, printer, or other technology for business use
• You bought furniture or fixtures for your business space
• You purchased a vehicle used for business (the business-use portion)
• You made improvements to a building or space you use for business

Easy to overlook

Section 179 lets you deduct the full cost in year one For 2025, you can deduct up to $2,500,000 of qualifying business equipment costs immediately instead of depreciating them over several years. ¹ This limit was increased by the One Big Beautiful Bill Act (OBBBA), which also restored 100% bonus depreciation for property placed in service after January 19, 2025. The deduction begins phasing out when total equipment purchases exceed $4,000,000. A photographer who buys $15,000 in camera equipment can deduct the entire amount in the year of purchase instead of spreading it over 5-7 years. [SOURCE: IRS Section 179 deduction limits]

Listed property requires more than 50% business use Computers, vehicles, and other assets the IRS considers “listed property” must be used more than 50% for business to qualify for Section 179 or accelerated depreciation. If business use drops to 50% or below in any year, you must recapture (pay back) the excess depreciation you claimed. Track your business-use percentage carefully. ² [SOURCE: IRS Publication 946 — How to Depreciate Property]

Watch out for this

Deducting the full cost of an asset as a supply or expense on line 22 when it should be depreciated on line 13. Assets with a useful life of more than one year — computers, furniture, equipment — must be depreciated (or expensed under Section 179), not simply deducted as supplies. A $3,000 laptop is not a supply. The IRS regularly reclassifies these during audits.

Related lines on your return

• Form 4562 — Depreciation and Amortization; the form where you calculate the deduction
• Line 9 — Schedule C — Car and truck expenses; vehicle depreciation may go here or on line 9, not both
• Line 22 — Schedule C — Supplies; low-cost items that are consumed, not depreciated