19.12 Small Tools
If you furnished your own small tools used on your job, you may deduct their cost if they are not expected to last beyond a year. The deduction is subject to the 2% AGI floor. The cost of tools with a useful life of more than a year must be recovered through depreciation or first-year expensing (42.3). Be prepared to substantiate your deduction with receipts showing the cost and type of tools purchased, and the business necessity for them.
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Filing Instruction
Office for Sideline Business
If you are an employee and also have a sideline business for which you use a home office, the office expenses are deductible if the office is used regularly and exclusively as your principal place of business or a meeting place with clients, customers, or patients. If the tests are met, you claim your home office expenses as a self-employed person on Form 8829, which you attach to Schedule C. The deduction may not exceed your income from the sideline business. See a sample Form 8829 and other deduction details in 40.15.
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