Deducting work related expenses. (tools)

Yes, you may be able to report this purchase as an Employee job-related deduction. See the instructions below on how to enter this in TurboTax.

Note that, as a cash-basis taxpayer, you have the benefit of deducting an expense that was paid on credit because you are obligated to pay off the associated debt. 

To enter these expenses in TurboTax, use the Search box at the right side of the TurboTax header. Type in "2106" (the form used to report these expenses) and hit Enter. Click on "jump to 2106" to go to the start of this section.

Or follow these steps:

1. Select Federal Taxes
   
2. Select Deductions & Credits, and in the next screen, click "I'll choose what I work on."
3. Scroll down the Deductions & Credits screen until you see the Employment Expenses group.
4. Click on the Start/Update button next to the Job-Related Expenses category.
5. Follow the prompts.

Employee job-related expenses are considered Miscellaneous Expenses; total Miscellaneous Expenses must exceed 2 percent of your adjusted gross income (AGI) in order to be included on your tax return. TurboTax will help you determine if your expenses can be reported and if your total Miscellaneous Expenses meet the threshold to be deductible.

If these tools were used in your self-employed business (Schedule C), you may report the cost under Assets/Depreciation for your business.

[revised 2/3/17 for clarity]

If you are an employee, then job-related expenses are no longer deductible as under the Tax Cuts and Jobs Act, the itemized deductions for job-related expenses subject to the 2% of AGI floor are suspended for expenses incurred after December 31, 2017 through 2025.

If you are self-employed, the answer above still applies.