Materials Or Tools?

Thewallfixer

I have recently entered the wonderful world of doing my own taxes on my small painting business that I just opened. So I am wondering about what count's as a tool and what is a material?

For instance I repair some plaster, obviously I can't write off the cost of the plaster, but can I write off a sanding block that I use? Since it only lasts until I sand this wall, is that a tool? or a material?

Or how about paint rags? or Tray liners? Even things like bags for a shop vac?

There are some other's that I am blanking on, but I was wondering is there a standard out there that I need to stick to?

Brushslingers

Sundries need to be kept track of, materials are your loss and need to be kept track of... though i'm not a tax expert my gal tells me I can write of part of my whites (uniforms), sundries, enter materials as job costs (loss) and depreciate all my equipment each year... even if it's paid for... not to mention lights, insurance, trucks.......

My advice? Get a tax gal.

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Benn

slickshift

Those are sundries or consumables
Not tools

Hire a tax pro
I know, I know, "I can't afford one"
Wrong
You can't afford not to have one

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Originally Posted by ModernStyle I have never used this crap before and I pray to the paint gods that I never have to use it again, I would rather use Behr

MakDeco

Don't be afraid of the tax man, his bark is bigger than his bite.

Thewallfixer

If there is anyone who is ripe for running his business using quickbooks it's me. I have no employees. All I do is repair plaster and paint. I own most the tools I need and the only thing I buy is materials for working on peoples house. I thought I was computer savvy and fairly intelligent, but there are some things I need to work through.

Like paying taxes quaterly. anywebsites out there you would recommend? The IRS website explains stuff okay, but thats about it.

I may get a tax gal, but I am going to give this a try.

Brian

There are a couple of ways to account for such things. You can depreciate the expense, or simply expense it. Depreciation is a total pain, and really isn't reasonable for small hand tools. My advice (and my CPA's) is to expense it at purchase.

I agree with the others who suggest getting a tax expert. It's worth the money and can save you a ton of time. (And time is money.)

Brian Phillips

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Houston Exterior Painting
Houston Painting Contractor

Danahy

Around here there are assets that depreciate, which includes tools over ($100 - $200), everything else gets used up immediately as materials, or direct expense to the job...

May get alittle funny, should you decide to pre-purchase a ton of materials, and have to carry that as inventory.... blah.... Unless you're saving a significant amount, I wouldn't bother with that...

slickshift

I agree
However, you'll still want a pro to do the taxes
And you'll need a pro to set up QB (unless you are reasonably skilled with accounting and/or accounting software programs)

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Originally Posted by ModernStyle I have never used this crap before and I pray to the paint gods that I never have to use it again, I would rather use Behr