Tools

[Christian]

Ac client has come in who is a highly skilled mechanic employed by a large truck sales dealership. She receives a W-2 each year as an employee but curiously must provide the tools she works with at her own expense. Her costs in 2023 for these tools is close to $4,000. The question here is are these tool expenses deductible for her and if so where on the return. She is not self employed so I am left wondering if these expenses are in fact deductible.

[Lee B]

I have a client who has a commercial vehicle brake, frame and alignment shop. They require their mechanics to provide their own tools.

It's a common industry practice. Unfortunately it falls under the 2% misc itemized deductions category which the TCJA eliminated.

Since she probably takes the standard deduction it's probably a moot issue.

[Christian]

I was thinking it was in the 2% category which was formally used on Schedule A. Well trying to help a client never hurts. Many thanks.

[Sara EA]

While it seems a bummer that mechanics can't deduct the cost of their tools, don't forget that they own them and can take them home or to their next job or sell them.  Many mechanics are fervent about their tools.  My husband was never a professional mechanic but started working on cars when he was a boy.  Today he has this tall chest of tools and can tell you when or how he acquired most of them, specific jobs this one or that one is good for, and  tasks from way back when one or the other saved the day.  When one of our sons neglected to put a screwdriver or whatever back where it belongs, he got in more trouble than if he was beating up his brother.  So while tools are an expense, they can also become part of a person's identity.

[Gail in Virginia]

But they are ridiculously expensive when you are starting out as a mechanic.  My son works as a mechanic on heavy equipment and it took him a couple of years to accumulate the tools (and tool boxes) that he needed to work with and get them paid off when he first started working.  But it is just part of the cost of his chosen field.  Along with the cost of the steel toed, non-slip boots he has to buy.  Fortunately, his uniforms are provided so that is an expense most of us have that he DOESN'T have to pay for along with the laundry to clean the hydraulic fluid and oil out of them.  Over the course of time, it probably evens out.  Because while those tools are expensive, they last. Uniforms don't.  

[mcb39]

IMO, this is one of the saddest changes in the tax law.  With the exit of the 2106 form, many employees are shot in the foot.  I particularly notice it with OTR truckers who are employees as opposed to SE owners.  This issue of mechanics and tools is also huge.

[Lee B]

At first glance I would agree, but aren't most client's current standard deductions larger than if they were able to itemize including the 2% misc itemized deductions.

[Max W]

In CA, still accepts those deductions that were eliminated on the federal return.  some other states may do the same.

 

[Lee B]

1 hour ago, Max W said:

In CA, still accepts those deductions that were eliminated on the federal return.  some other states may do the same.

 

Oregon has very low standard deductions, so many taxpayers still itemize.

However Oregon does not allow the 2% misc itemized deductions.

[Terry D EA]

On 2/20/2024 at 6:58 PM, Lee B said:

I have a client who has a commercial vehicle brake, frame and alignment shop. They require their mechanics to provide their own tools.

It's a common industry practice. Unfortunately it falls under the 2% misc itemized deductions category which the TCJA eliminated.

Since she probably takes the standard deduction it's probably a moot issue.

Absolutely correct. I worked as a Master Auto Technician for years. Tools are ridiculously expensive and have always fallen under the 2% rule.

[mcbreck]

Saw an Instagram video where they went through the garage of an auto repair shop and asked each mechanic their SnapOn Tools current debt balance. 

If you want to see a REALLY impressive tool collection, visit an old farm equipment repair guy. My grandfather had a Massey dealership and worked on everything except Deere (which his brother in law owned).

[mcb39]

On 2/21/2024 at 9:40 AM, Lee B said:

At first glance I would agree, but aren't most client's current standard deductions larger than if they were able to itemize including the 2% misc itemized deductions.

My reference was to the loss of the form 2106 Employee Business Expenses and, no, single employees especially, are affected by the loss of this deduction.  For many OTR truckers, it equaled the value of at least one exemption under the "old" rules., particularly if they owned a home.  I am so tired of the government playing games with the tax laws.  Clients still bring in all of their itemized deductions and we still populate the Schedule A because there are cases wherein the deductions flow through to the Wisconsin returns.

[BrewOne]

frankly I didn't mind pharma reps losing the deduction for their vehicles, or those who were deducting expensive clothes and dry cleaning on Schedule A (I know, they weren't supposed to)...but mechanics weren't in a position to demand their employers compensate them for tools when the law changed.

[jklcpa]

All of the off topic posts not related to tools deduction have been hidden.