Where Does Depreciation Go on a Business Tax Return?
From Form 4562 to page 1: line 20 on Form 1120, line 14 on Form 1120-S, and lines 16a to 16c on Form 1065, where 16b subtracts the depreciation reported on Form 1125-A. The forms are explicit that page 1 carries only the depreciation not claimed on Form 1125-A or elsewhere, so the same deduction cannot appear twice.
| Trial balance account | Where it goes on the return | Watch for |
|---|---|---|
| Tax depreciation | Form 4562, to 1120 line 20 or 1120-S line 14 | Not the book figure |
| Depreciation, partnership | 1065 line 16a, less 16b, equals 16c | 16b is the 1125-A portion |
| Production depreciation | Form 1125-A | Excluded from the page 1 line |
| Book depreciation per the trial balance | Not entered as a deduction | Schedule M-1 difference |
| Section 179 | Form 4562 Part I | Separately stated on a pass through |
| Amortization | Form 4562 Part VI | Same page 1 line as depreciation |
| Accumulated depreciation | Schedule L line 10b (9b on a 1065) | Balance sheet, not page 1 |
One account at a time works until there are 200 of them.
Try it freeWhere Does Depreciation Go on a Business Tax Return? on a trial balance
| Acct # | Account | Debit | Credit |
|---|---|---|---|
| 1000 | Cash | 42,800.00 | |
| 1200 | Accounts receivable | 68,500.00 | |
| 1300 | Inventory | 55,000.00 | |
| 1500 | Equipment | 145,000.00 | |
| 1510 | Accumulated depreciation | 47,500.00 | |
| 2000 | Accounts payable | 28,400.00 | |
| 2100 | Accrued expenses | 9,200.00 | |
| 2400 | Notes payable | 92,000.00 | |
| 2450 | Due to shareholder | 15,000.00 | |
| 3000 | Common stock | 10,000.00 | |
| 3900 | Retained earnings | 86,300.00 | |
| 3950 | Shareholder distributions | 52,000.00 | |
| 4000 | Gross receipts | 612,000.00 | |
| 5000 | Cost of goods sold | 318,000.00 | |
| 6000 | Salaries and wages | 88,000.00 | |
| 6050 | Officer compensation | 72,000.00 | |
| 6300 | Depreciation expense (the account this page is about) | 21,500.00 | |
| 6900 | Other operating expenses | 37,600.00 | |
| Total | 900,400.00 | 900,400.00 |
Example journal entries
| Account | Debit | Credit |
|---|---|---|
| Depreciation expense | 21,500.00 | |
| Accumulated depreciation | 21,500.00 |
The form tells you about the double deduction
The page 1 depreciation line on Form 1120 and Form 1120-S reads: depreciation from Form 4562 not claimed on Form 1125-A or elsewhere on the return. Form 1065 handles it arithmetically instead, with line 16a for depreciation, line 16b for the depreciation reported on Form 1125-A and elsewhere, and line 16c as the net.
Both designs exist because the same depreciation can legitimately belong in two places and must only be deducted once. Production equipment depreciation belongs in the cost of goods computation; everything else belongs on page 1.
Book depreciation is not the input
The trial balance shows what the client's bookkeeping computed, on lives and methods somebody chose. The return reports what Form 4562 computes, with MACRS lives, section 179 and bonus depreciation.
Those are different numbers by design, and the difference belongs on Schedule M-1. What is not acceptable is entering the book figure as a deduction while the asset detail also produces one, which deducts the same cost twice and triggers nothing.
Section 179 leaves page 1 on a pass through
A partnership or S corporation does not deduct section 179 at the entity level. The expense passes through on the K-1 and the limitation is applied at the owner level, where it depends on the owner's business income.
So a 4562 with a 179 election and a page 1 depreciation line that does not reflect it is correct behavior rather than a problem.
Amortization rides along
Amortization of section 197 intangibles is computed in Part VI of Form 4562 and reported with depreciation on page 1.
It is also the deduction most often missing entirely, because it does not appear on the trial balance. A client with goodwill on the balance sheet and no amortization expense may still have 15 years of deductions available, and the only way to know is to look at the acquisition date and the purchase price allocation.
The balance sheet connection
Accumulated depreciation belongs on Schedule L line 10b, or 9b on a 1065, separately from the asset cost. Beginning accumulated depreciation does not appear on a current year trial balance at all, which is why it is the single most common cause of a Schedule L that will not tie.
Tax return treatment
| Form | Line |
|---|---|
| Form 1120 | Page 1 line 20, from Form 4562, excluding 1125-A depreciation |
| Form 1120S | Page 1 line 14, from Form 4562, excluding 1125-A depreciation |
| Form 1065 | Page 1 lines 16a, 16b and 16c |
Common questions
What line is depreciation on each business return?
Line 20 on Form 1120, line 14 on Form 1120-S, and lines 16a to 16c on Form 1065, all sourced from Form 4562. On the corporate forms the line excludes depreciation claimed on Form 1125-A; on the 1065, line 16b subtracts it.
Should I use the depreciation figure from the client trial balance?
No. The return computes depreciation from Form 4562 using MACRS, section 179 and bonus depreciation. Entering the book figure as well deducts the same cost twice, and the difference between book and tax depreciation belongs on Schedule M-1.
Why does section 179 not appear in the page 1 depreciation on an 1120-S?
Because a pass through entity does not deduct section 179 at the entity level. It passes through on the K-1 and the limit is applied on the owner return, where it depends on their business income.
Where does amortization go?
Form 4562 Part VI, reported with depreciation on the same page 1 line. It is the deduction most often missed, because an intangible on the balance sheet with no amortization expense on the trial balance still usually has deductions available.
Related answers
Go deeper
This page is the short answer. These articles work through the same ground in detail.
Last reviewed October 18, 2026.