Employee - mechanic - must purchase own tools. I understand if small tools it's deducted on schedule A subject to 2%. What if they are large tools - $500+? Depreciate? Sec 179? and bring also to sch A? This mechanic makes 60,000 and spent 3200 on tools. Thanks
Well, it's not reeally the size of the tools, but their useful life.
If they are not expected to last beyond a year, then regardless of size or cost they are expense items.
As an example, GM purchases drill press dies that can easily run well over $1 million each, but the stamping takes a toll on those dies and they well might be expected, and do last only 8-9 months.
(Of course GM doesn't file a 1040 Schedule A :^)
For tools lasting longer than a year, you would dpreciate them and have the option of S 179.
If this year Misc deductions won't break the 2% barrier even with S 179, then don't 1179 them, and use S-L instead. Your 60,000 mechanic with only 3200 in tools needs lots more Misc 2% before your question becomes moot.
You don't actually file the depreciation form even if you do depreciate.
And for heaven's sake, please don't run the tools through a
2106, which is for T&L.,
Note: 2% of $60k = $1,200 < $3,200, so ??? If he 179'ed them, he'd get a $2k deduction (just for this alone), so why "needs lots more ....?"
Se what happens when I use a slide rule instead of an abacus? Misplaced decimals.....
How does one recapture depreciation on this item? Say he does 179 and gets $800 deduction. Then we he sells he only recaptures $800, and on which form is the gain/loss reported?
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