Mechanic Tool Expense

[LindaK]

I have never seen a mechanic/employee who did
not write off their annual tool purchases.

I'm looking through old threads and found this comment from 2006. My question is how do they write off their annual tool purchases? My understanding is that they use Form 2106 which is a benefit only if they itemize and if the tools are more than 2% of AGI. In other words, very few are able to deduct their tools. Specifically, my client has been able to write off tools against self-employment income in prior years, but that does not apply to 2007. He was a mechanic with only W-2 income last year. His total itemized expenses do not reach the standard deduction.

[Bees Knees]

If the W-2 is his only income, then the depreciation goes to Form 2106, subject to the 2% AGI limit.

I would fill out a 2106 even if he can't itemize, and depreciate the tools over 7 years electing the straight line method. The straight line method will give you the least amount of depreciation this year that will be wasted. Then if he has some self employment income in future years, you can allocate some of that year's depreciation to his Schedule C.