"All that tool money comes back" - Bull!

[TNToy]

So, if you know any professional wrench-turners, you'll frequently hear them say that "what I spend on tools comes back to me on my tax return". I already knew from past experience that this was false. But here's some proof:

This year's figures?

Tools (This is just what I spent on the tool trucks)... Doesn't include a lot of stuff from Harbor Freight, welding supplies at home, powertools for the house, consumables, etc...
$2,753

Total refund?
$332

 

[ImportTuner]

So, if you know any professional wrench-turners, you'll frequently hear them say that "what I spend on tools comes back to me on my tax return". I already knew from past experience that this was false. But here's some proof:

This year's figures?

Tools (This is just what I spent on the tool trucks)... Doesn't include a lot of stuff from Harbor Freight, welding supplies at home, powertools for the house, consumables, etc...
$2,753

Total refund?
$332

At least you get a refund; I owe $7K ...

 

[KeukaDan]

Just because it is deductible doesn't mean you will get it back, all it means is it will lower your taxable income.

I wish it was a direct reduction from my taxes, that would be great.

 

[chad s]

I dont think anyone really expects the government to pay for your tools!

 

[wilbilt]

I never had enough deductions to justify itemizing, tool purchases included.

I will have to revisit that possibility, now that my two oldest deductions have moved out.

 

[wilbilt]

I dont think anyone really expects the government to pay for your tools!

That's not really the point. If you are required to personally purchase items in order to be employed and support yourself, should you be taxed on the income used to make such purchases?

 

[chad s]

That's not really the point. If you are required to personally purchase items in order to be employed and support yourself, should you be taxed on the income used to make such purchases?

No, but the claim that "what I spend on tools comes back to me on my tax return" seems to imply that if you buy a tool for $100, you get the $100 back on your return, not the state tax ($5 in this case here in Maryland).

Bases on TNT's figure, in MD, Id get back $137 on his figure.

 

[djjack]

Are tools depreciated over time? If so you might be able make deductions for a few more years.

 

[wilbilt]

No, but the claim that "what I spend on tools comes back to me on my tax return" seems to imply that if you buy a tool for $100, you get the $100 back on your return, not the state tax ($5 in this case here in Maryland).

Bases on TNT's figure, in MD, Id get back $137 on his figure.

There is a percentage of the purchase price that can be deducted at the federal level. I believe that depreciation can be claimed on them over a period of years as well.

In my case, my itemized deductions never topped the "standard deduction", so there was never any point in pursuing it.

 

[PAToyota]

Yes, but how much were you going to pay before you did itemize? I only got a couple hundred back this year, but if I took out all my deductions I was going to owe over $1K...

 

[TNToy]

Yes, but how much were you going to pay before you did itemize? I only got a couple hundred back this year, but if I took out all my deductions I was going to owe over $1K...

I was going to get back $127. It really made very little difference.

The only reason I posted this thread is because we all know mechanics who make it sound like the government is basically paying for your tools... nope.

That's it.

 

[972500]

what ive always done is just save all the recipts for tools through the year and hand them over to the guy that does my taxes for me. he adds them all up i guess and does somthing with that number and all it does is lower the amount of money the govt thinks u made. so say made $30,000 and u bought $5,000 worth of tools then your only taxed on $25,000 so u arent nessicarly getting it back but still it helps. a buddy of mine went to the same guy i went to(most the guys from the shop do) and had about 20,000 in reciepts and he only works part time at our shop so he had only mad about 10,000 there and all his other money comes from side jobs payed in cash so he made that mistake and ended up getting audited because the accountant reported it. so dont forget ot make sure u got your numbers stright
Mark

 

[Hawk231]

I dont think anyone really expects the government to pay for your tools!

The government doesn't own the money that he earned. They get a mandatory % of it in taxes. If he could reduce the government's % for the full price of the tools more power to him.

.02

If it were possible to deduct the full price, I'd turn wrenches part time for a year at a quickie lube place and have a box full of new tools.

 

[BoostAddiction]

The only reason I posted this thread is because we all know mechanics who make it sound like the government is basically paying for your tools... nope.

Why in the world would you listen to mechanics giving tax advice?

 

[Charles (in GA)]

what ive always done is just save all the recipts for tools through the year and hand them over to the guy that does my taxes for me. he adds them all up i guess and does somthing with that number and all it does is lower the amount of money the govt thinks u made.

And the odds are, the tax preparer was able to do little or nothing with it, very likely he gave you the standard deduction unless you have some high expenses that he was able to add up and deduct.

Quoting from page A-6 of the form 1040 instruction booklet (the instructions for schedule A which is itemized deductions, "Job Expenses and Certain Miscellaneous Deductions - You can deduct only the part of these expenses that exceeds 2% of the amount on Form 1040, line 38. thus if you made $100,000 (line 38 is esentially all your income totaled up) then you could deduct everything you spend on your tools, work uniforms, subscriptions to professional publications, small tools and supplies, union dues and fees to professional organizations (all of this must be work related)...... that exceeded $2000. In this example, if you spend $2500 on such items this year, then you would get to deduct $500.......... all of this being dependent on your being able to itemize your deductions in the first place. The standard deduction for married filing jointly is $10,300 so for you to be able to add up enough stuff to itemize is pretty tough for most people. I'm single and the house is paid off (no interest to deduct), and just barely able to total up property taxes and state income taxes that exceed the $5,150 standard deduction for single persons.

Charles

 

[toolfreak]

I always heard that and found out that it is bs. I bought a camper for working out of town instead of wasting my money at hotels and thought I would get a decent amount back. They depreciated over 7 years and I get a few hundred a year back. It is still better than nothing and I will have something to show for the money spent for out of town living.

 

[TNToy]

Say you made $30,000 and u bought $5,000 worth of tools...

If I made anywhere in the ballpark of 30K turning wrenches, I'd quit tomorrow. There's no way I'm working this hard for that kind of money.

And the odds are, the tax preparer was able to do little or nothing with it, very likely he gave you the standard deduction unless you have some high expenses that he was able to add up and deduct.

Correct. I'm married / joint / homeowner who donated a bunch to my church, bought a lot of tools, and had quite a few other deductions... and I still only made it to about $12K in deductions.

Why in the world would you listen to mechanics giving tax advice?

I didn't say I listened. But it's still annoying to hear misinformed people talking.