Dismiss Notice

Welcome To CK5!

Registering is free and easy! Hope to see you on the forums soon.

Score a FREE t-shirt and membership sticker when you sign up for a Premium Membership and choose the recurring plan.

Technicians, what do you do about deductions come tax time?

Discussion in 'The Lounge' started by sled_dog, Jan 29, 2007.

  1. sled_dog

    sled_dog 1 ton status

    Joined:
    Sep 3, 2002
    Posts:
    16,870
    Likes Received:
    0
    Location:
    Austin, TX
    I have had this discussion with a few other techs and haven't come up with what I should do yet. Namely, I have been told I can either deduct what I have paid on my tools, or what I have actually purchased. Now the amount I have actually purchased is about 50% of my pay for last year. Thats a lot to deduct. I have been told however, whatever I do is what I have to continue doing. So next year I would have to deduct only what I purchased for the year. I am sure I will be purchasing another large amount of stuff next year(need a new toolbox very soon, and still don't have half the stuff I need on a weekly basis). So what do you guys do come deduction time?
     
  2. Leper

    Leper 1/2 ton status

    Joined:
    Feb 18, 2005
    Posts:
    4,437
    Likes Received:
    0
    Location:
    Dallas Baby!!!!
    when I was a tech, I depreciated the expensive stuff(250.00 and over) over several years, 5, I think, and everything I bought I wrote off as expenses. That included my uniform bill, belts or shoes that were work only, tools, etc.
    I used the amount of the tool price, not what I was paying on my account.
     
  3. ryoken

    ryoken Puppy Fabricator Premium Member GMOTM Winner

    Joined:
    Jun 13, 2003
    Posts:
    29,624
    Likes Received:
    1,380
    Location:
    Jersey Shore
    I claim what I lay out... Not the overall purchase...
     
  4. PsRumors

    PsRumors 1/2 ton status

    Joined:
    Nov 11, 2006
    Posts:
    626
    Likes Received:
    0
    Location:
    Cartersville, GA
    Run it both ways. Generally speaking you will be better off depreciating over 5 years, especially if it was half your income. Each item is what is depreciated. So if you need more this year take a chunk for several tools and then depreciate the rest.
     
  5. ryan22re

    ryan22re 1/2 ton status

    Joined:
    Feb 5, 2005
    Posts:
    3,368
    Likes Received:
    0
    Location:
    Irmo, SC
    I claimed what I paid that year. The tool man(men depending on how many different tools you buy) should be able to give you a receipt based on what you paid them over the year.

    I also deducted boots, sock, uniforms, belts gloves and so-on. I've always had my taxes done by a professional. Keep the receipts and you won't have to worry about getting audited. If you do, most tax companies have audit insurance or protection.
     
  6. sled_dog

    sled_dog 1 ton status

    Joined:
    Sep 3, 2002
    Posts:
    16,870
    Likes Received:
    0
    Location:
    Austin, TX
    We have yet to discuss it with the accountant, his input will be taken rather largely. I have all receipts for the past year, already got my tax slips from the different tool guys. I don't have any for boots and stuff like that, never thought about it until it was too late.
     
  7. skyyk5

    skyyk5 1/2 ton status

    Joined:
    Jan 2, 2007
    Posts:
    1,537
    Likes Received:
    0
    Location:
    N.E. PA
    Only one year did i deduct my tools, boots, travel expense. But I came out the same % the next with a basic return. I don't bother anymore, but now i just have the company pay for half my tools for the year, and milage for call-in's. You should talk to your accountant about it though. It is different for everyone.
     
  8. jarheadk5

    jarheadk5 1/2 ton status

    Joined:
    Mar 6, 2000
    Posts:
    4,389
    Likes Received:
    0
    Location:
    PA
    I just tell my tax guy what I spent for the year, and he figures it out.

    I haven't spent 50% of my annual income for tools though, so that probably makes a big difference in how much to claim. Best I can tell ya...
     

Share This Page