Entering section 179 depreciation directly on the 4562 in ProSeries

When using Form 1040, 1120, 1120S, 1065 and 990 in ProSeries, section 179 information entered directly on Form 4562 instead of the Asset Entry Worksheet may not calculate correctly and prevent the e-file of the client's return.

There are two ways to resolve this issue:

• Activate the Federal Depreciation Options to calculate the section 179 business income on Form 4562, Part 1, line 1.
• Enter section 179 information on the Asset Entry Worksheet instead of entering it directly on Form 4562.
  • Refer to this article for instructions on entering section 179 information on the Asset Entry Worksheet.

What's new for tax year 2025

The One Big Beautiful Bill brings many changes to Section 179 and Special Deprecation Allowance. Here are some of the key updates:

• Qualified production property placed in service after July 4, 2025, the construction of which began after January 19, 2025, may be eligible for a 100% special depreciation allowance.
• Section 179 deduction dollar limits have been increased, including the amount for SUV's.
• For certain qualified property placed in service before January 20, 2025, a phase-down of the special depreciation allowance is in place.
• Certain qualified property placed in service after January 19, 2025 may be eligible for 100% special depreciation allowance or you can elect to take 40%.
• Domestic research and experimental expenditures may be amortized over either a 60 month, or 10-year period. Different periods apply for foreign research.

For full details, review the 4562 instructions.

Instructions for entering this in ProSeries are coming soon. For more information, see Applying the One Big Beautiful Bill changes to Depreciation in ProSeries.

Follow these steps to enter section 179 information on Form 4562:

These steps won't resolve the e-file error. If you want to e-file the return, make sure there aren't any other errors and turn off error checking. Refer to this article for instructions on disabling error checking.  

1. Open the client's return.
2. Press F6 on your keyboard to open the Open Forms window.
3. Enter "DEO" to highlight the Depr Options.
4. Select OK to open the Federal Depreciation Options.
5. Under the MACRS Convention section, check the Compute Convention box.
6. Save the return.

How are section 179 carryovers from a prior year entered in an 1120S, 1120, or 1065 return?

Section 179 carryovers from the prior year are entered on line 10 of Form 4562. This amount is automatically calculated if the prior-year return was transferred.

The amount that's transferred can be found on the Depreciation Options Worksheet. Section 179 carryovers to next year are automatically calculated on line 13 of the Form 4562.