Can I Write This Off?

Can I write off tools for a handyman business?

TL;DR

Yes, tools purchased for a handyman business can generally be written off as a business expense.

Detailed Answer

Tools and equipment purchased for use in a handyman business are considered ordinary and necessary business expenses and can be deducted. These expenses are deductible if they are used for business purposes and are not personal expenses. If the tools have a useful life of more than one year, they may need to be capitalized and depreciated over their useful life rather than deducted in the year of purchase.

Where to Put It on the Tax Form

Schedule C (Form 1040), Part II, Line 22 for Supplies or Line 13 for Depreciation if applicable

Real World Example

A handyman purchases a new set of power tools for $800 to use exclusively for his business. He can deduct the full amount as a business expense if the tools are expected to last less than a year. If the tools are expected to last several years, he may need to depreciate the cost over the useful life of the tools.

Calculation Required

A calculation is required for this deduction.

If the tools are capitalized, you need to calculate depreciation using methods such as MACRS. For example, if the tools are classified as 5-year property, you would use the IRS tables to determine the annual depreciation deduction.

Audit Risk & Documentation Tips

Keep receipts, invoices, and proof of payment for all tool purchases. Maintain a log of how and when the tools are used for business purposes to substantiate the deduction. Be prepared to show that the tools are necessary for your business operations.

IRS Reference

IRS Publication 535, Business Expenses; IRS Publication 946, How to Depreciate Property

Relevant Industries

HandymanConstructionTradesSmall Business

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Disclaimer: This is for informational purposes only and should not be construed as tax or legal advice. Always consult your tax advisor.

Page created on July 7, 2025

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