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Thread: Work, woodworking projects, taxes?

  1. #1

    Work, woodworking projects, taxes?

    This is kind of a complicated question, and unique to me in some ways as I am a Machinist by trade, do woodworking as a hobby, and often make projects that help me stay organized at work.

    Now we all know that any personal tools you purchase so you can do your chosen craft better,and is not covered by a work purchase program, can be deducted off your taxes come April 14th. So my question is, since I often build wooden toolboxes, and other wooden items like sand paper holders, pigeon holes and cabinets, can I deduct these off my income taxes as well? Its really no different then going out and buying say a Snap On Toolbox for $500 bucks or something?

    Now assuming I can do this, what is deducted...just the cost of the materials such as wood and hardware, or can I deduct the what the toolbox is worth as if I was to sell it to some guy in the newspaper or something? Its kind of gray because what I spent to build it, might be actually quite low compared to its worth, but my time has got to be worth something?

    Just curious?
    I have no intention of traveling from birth to the grave in a manicured and well preserved body; but rather I will skid in sideways, totally beat up, completely worn out, utterly exhausted and jump off my tractor and loudly yell, "Wow, this is what it took to feed a nation!"

  2. #2
    Join Date
    Oct 2006
    The Heart of Dixie
    Sorry, but I wouldn't want to trust any answers I got here. Need to talk to an accountant. Don't want to mess with the IRS!
    God grant me the senility to forget the people I never liked anyway,
    the good fortune to run into the ones I do,
    and the eyesight to tell the difference.

    Kudzu Craft Lightweight Skin on frame Kayaks.
    Custom built boats and Kits

  3. #3
    Join Date
    Mar 2007
    Escondido, CA
    Talk to a tax professional. All you can get here are opinions. Shoot, even when you call the IRS, all you get is an opinion, and they are not bound by their own opinions.

    A tax professional is one who can defend their position in a tax court.

    I rather doubt your labor is deductible though. An item made for charity might be a parallel. There you can only deduct materials.

  4. #4
    Join Date
    Feb 2008
    Cedar Park, TX
    I agree, a tax accountant would be the one to ask about that.

    I play it safe with the IRS. I made and donated several pieces of altar furniture to my Church last year. While I might have been able to deduct the market value for the items, I deducted only the cost of materials, and even then did not include stuff like glue and sandpaper and such. BTW, beginning with last year's returns you need to have receipts for all such donations.

    "If politics wasn't built on careful deception it wouldn't need its own word and techniques. It would just be called honesty, education, and leadership."
    Bob "Phydeaux" Stewart one day on Woodnet

  5. #5
    Join Date
    Oct 2006
    I am not going to purport to be a tax genius, that is what my tax accountant/lawyer is for. In the past she has been able to reduce my taxable income utilizing some formulas for time vs material. I would very strongly advise you seek counsel on this one. It may save you a bundle.

  6. #6
    I agree that the opinions posted here are often slanted and are best left to the pros. But in my humble opinion (having just finished my taxes and contributed to the illegal alien fund with an additional check) Unless that cabinet/tool box or whatever you made is used in a BUSINESS in which you use to make REPORTED gains or losses, it cannot be claimed. Remember, should you decide to "Make a Business" to report gains and losses, you have to set up an account and pay top nd taxes from the profits and Social Security on every dollar you earn even if it is a loss. Are you ready to do that?

  7. #7
    Alan DuBoff is offline Former Member (by the member's request)
    Join Date
    Nov 2006
    Last edited by Alan DuBoff; 02-27-2008 at 08:29 AM.

  8. #8
    Alan DuBoff is offline Former Member (by the member's request)
    Join Date
    Nov 2006
    Last edited by Alan DuBoff; 02-27-2008 at 08:13 AM.

  9. #9
    Join Date
    Dec 2006
    Talk to a pro if you want, but I don't think its not going anywhere. Even if you can make such a deduction, once you start itemizing, you find out what an incredibly good deal the standard deduction is. I've only ever itemized when I had mortage interest or huge amounts of un-reimbursed mileage in a temporary job. All other times I did the paper work, i found I could accumulate about a fifth of the standard and just left it at that. Now if you do have a mortage for example, it might be worth it.

  10. #10
    Join Date
    Nov 2006
    Odessa, Tx
    I have NO idea what the tax rules are NOW, (that's what I pay the accountant for), but several yrs back, I had a situation "Similar" to your's, Travis, and my accountant at the time told me that;
    I could write off the cost of the materials used without a problem, But....if I wanted to write off more than that, (such as value added for my time, that it was a NO WIN situation, because I would have to show that money as INCOME and be taxed on that. The write off for the use of the shop tools required too much paperwork for it to be worth while to me to fool with so I didn't do it.

    NOTE: I have no idea if the above mentioned information would apply the same with the current tax rules or not, Soooooooo........ as the others have stated, See a Tax Accountant, (and a GOOD one at that).

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