Where do tools go on Schedule C?
Line 22 — Supplies (or Line 13 — Depreciation)
Inexpensive hand tools with a short life go on Schedule C Line 22, 'Supplies', and are deducted in full in the year purchased. Expensive, long-lived equipment is a capital asset: it is reported through depreciation on Line 13, though Section 179 or bonus depreciation may allow you to deduct much or all of the cost in the first year. There is no single dollar cut-off that applies to everyone — use your business's capitalisation policy and apply it consistently.
Examples
- A $40 set of screwdrivers — supplies.
- A $600 nail gun — often supplies under a capitalisation policy.
- A $9,000 machine — capitalised, then Section 179 or depreciation.
Watch out for
- Keep the invoice for anything capitalised; you will need the date and cost for years.
- Section 179 has annual limits and business-income restrictions.
- Tools used partly at home for personal projects require a business-use split.
Full checklist for your trade
Stop guessing the category
DocuSpending reads each receipt and assigns the Schedule C category for you, then totals the year on demand.
General information, not tax advice. Amounts, limits, and percentages change between tax years — check the current IRS Schedule C instructions or ask a tax professional about your situation.
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