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JDDAVIS59
Level 1

The last agent had me delete my return! can it be retrieved?

what is the 2 percent tax liability mean on tool deductions?
2 Replies
RayW7
Expert Alumni

The last agent had me delete my return! can it be retrieved?

If you are self-employed or an independent contractor (your pay gets reported on a Form 1099-NEC 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.

 

VolvoGirl
Level 15

The last agent had me delete my return! can it be retrieved?

But further.......employee job expenses on Schedule A have been suspended.  See Deductions that have been suspended for 2018-2025

https://ttlc.intuit.com/questions/4482873-which-federal-tax-deductions-have-been-suspended-by-tax-re...

 

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