The payments on the credit account are not, themselves, tax deductible, but the cost of the tools purchased probably are.
If you are self-employed or an
independent contractor (your pay gets reported on a Form 1099-MISC
rather than a W-2) then you can certainly deduct the cost of tools and supplies
as a business expense.
- Under the Business tab, select Business
expenses > Other common
business expenses;
- Scroll down to Supplies;
- This will take you to a
screen where you may list categories of supplies (i.e., hand tools,
supplies, etc.) and the associated amounts.
If you are an employee (pay
is reported on Form W-2), you can claim those tools and supplies as an
unreimbursed employee expense on Schedule A. This will only be a benefit to you
if you itemize your deductions rather than taking the standard deduction.
Further, unreimbursed employee expenses are subject to the 2% rule, meaning
that you can only deduct the portion of the expense that exceeds 2% of your
Adjusted Gross income.
For more information, please see IRS Pub. 529 Miscellaneous
Deductions.
