You'll need to sign in or create an account to connect with an expert.
Yes you can place them on Schedule C, but how it will be reported depends on the type of tool and its lifetime.
If the tool has an expected lifetime of 1 year or less, you can place the cost of this tool in your regular expenses. Since you mentioned tools items like this are, screwdrivers, drill bits, small power equipment, etc. are allowed to be expensed in the same year. Simply place this under Materials and Supplies.
If the tools you purchased has a lifetime of more than one year, the cost of the tool will be amortized and placed on a Depreciation Schedule. This depreciation Schedule will allow you to expense (deduct) a set amount for the length of the depreciation period you choose. TurboTax will walk you through this process.
Your last option is a Section 179 Deduction. This option will allow you to deduct, part, or the entire cost of the equipment you purchased. There are other rules but the most important limitation is that you cannot create a loss with a Section 179 Deduction.
As I mentioned above, TurboTax will walk you through all of these processes. If you choose, or you must, depreciate the tools, I highly suggest that you keep a complete copy of your Tax Return and all of the worksheets for next year. In order to determine your depreciation expense for 2017 you will need the information from 2016.
Below is an article that provides a more thorough explanation of how you can report the purchase of equipment for your business:
https://turbotax.intuit.com/tax-tools/tax-tips/Small-Business-Taxes/Depreciation-of-Business-Assets/...
Still have questions?
Questions are answered within a few hours on average.
Post a Question*Must create login to post
Ask questions and learn more about your taxes and finances.
RUTH1949
New Member
tonyvanw
Level 1
Punky0202
New Member
fellynbal
Level 2
davetm
Returning Member