New car restoration side business - tax deduction?

[lzo]

Hi,

I work full time (W2) for a company, and also have a side business that someone helps me run.

In addition, during 2016 I started a small car restoration business.  My goal is to (eventually) make a profit, so I've been sure to do certain things, such as:

- Create a website for my restoration

- Create business cars for distribution at car meets and shows

- Documenting all expenses spent (down to individual tool purchases, and documenting every hour spent restoring)

- Rented a storage facility to store the tools for restorations

I purchased the first car near the end of 2016, and am wondering if the expense for that car can be tax deductible (as well as the tools purchased for the business)?

I hope so, as it was a significant expense, and probably won't be until next year before I'm able to get it restored to the point of being able to sell it.

[NancyG]

Yes, many of the paid expenses for your business can be deducted.  However, the car is considered inventory. 

Your new business would be reported on IRS Schedule C. 

The following link will provide additional information and ideas for your situation:

Reporting Self-Employment Business Income and Deductions