If you are self-employed, you can deduct them on your Schedule C as a business expense.
If you are an employee, you can include your tools purchase as an employee expense. Keep in mind, though, that the expenses will only be deductible IF:
- You itemize your deductions (Schedule A); AND
- All of your unreimbursed employee business expenses and other miscellaneous itemized deductions added together are more than 2% of your AGI. [Only the amount over 2% AGI is deductible.]
To include job expenses in your return, please follow these steps:
- Click on Federal Taxes [Personal in TurboTax Self-Employed] > Deductions & Credits.
- Scroll down to the Employment Expenses section and click on the Start/Revisit box next to Job Expenses for W-2 Income. [See Screenshot #1, below.]
- On the Employment Expenses Related to a W-2 screen mark the Yes button and click Continue. [Screenshot #2]
- On the next screen, Did you have any of these expenses in 2016? mark the Yes button and click Continue. [Screenshot #3]
- Continue through the screens, entering the requested information.
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