Pricing your shop tools and machines.

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Forum topic by pete57 posted 02-20-2010 11:37 PM 1088 views 0 times favorited 2 replies Add to Favorites Watch
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134 posts in 2835 days

02-20-2010 11:37 PM

Topic tags/keywords: question

I started a business last year and this is the first year I am trying to get the taxes done. I sent in all the business expences receipts. I sent in machines bought and hand tools purchased. The tax guy wants prices on all my tools and machines. Anyway, the question is how do you go about pricing machines and hand tools?? Do I just write off the tools that I use to make chairs or for eveything that I build? I only purchased tools to make chairs and had all the rest. My table saw is older than most people that I work with and the same for all the other stuff. I still use drills with cords(I have cordless also). Anyone out ther know about getting taxes done. Taxman says it will de-appriciate very year. I want to be up and up cuz I have been to battle with the IRS and they always win.

The truth is that I am planning for a building and getting some new machines. I want to write these off if I can. The shop will sit in my property but heve its own power, water, heating, and will tie into my sand mound and the rainwater will drain off into the existing sistern. That is the plan?

-- Humble Wood Servant

2 replies so far

View Sawkerf's profile


1730 posts in 2492 days

#1 posted 02-21-2010 12:17 AM

When I did this, my accountant had me estimate a fiar market value for the tools I owned at the time. This made them company assets. He also set up accounting catagories for purchasing new large and small tools. Small tools (<$200) are considered business expenses. Large tools become asssets – which are depreciated over time.

Your building will be an asset and the utilities will be operating expense. The amount of the decuction will depend on the percentage of use for business v.s. personal reasons.

If you haven’t already done it, get an accountant. They’re worth it. Your expertise is elsewhere. – lol

-- Adversity doesn't build reveals it.

View Ed's profile


19 posts in 2536 days

#2 posted 02-21-2010 01:48 AM

I suggest that you find a good tax lawyer first. Accountants are very good at determining your deductions, but they need to know how your business is structured first. Tax lawyers are very good at the structure part!

For example, you may want to lease the equipment to your business (depending on your tax situtation). It could reduce your overall taxes and personal liability.

I’m not trying to confuse the situtation, but as as Certified Public Accountant, I hired a tax lawyer to set up my business and now I’m doing the number crunching. I was lucky to find a great lawyer that charges less than he saves me. I hope there is one in your area!


-- Ed

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